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Economy in Brief

U.S. Industrial Production Much Stronger than Expected in April
by Sandy Batten  May 17, 2022

• Solid increase in all three major categories.

• Manufacturing increase led by motor vehicles.

• Capacity utilization strengthens to highest level since December 2018.

Industrial production increased 1.1% (6.4% y/y) in April following an unrevised 0.9% gain in March. A 0.4% increase had been expected in the Action Economics Forecast Survey. Manufacturing output rose 0.8% m/m (5.8% y/y) in April, the same monthly increase as in March (revised down slightly from 0.9%). Utilities output increased 2.4% m/m (7.5% y/y) following a 0.3% decline in March. Mining output gained 1.6% m/m (8.6% y/y) in April after a 1.9% m/m increase in March.

The increase in manufacturing output in April was once again led by motor vehicle and parts production, which was up 3.9% m/m on top of an upwardly revised 8.4% monthly gain in March (initially 7.8% m/m). Durable goods manufacturing was up 1.1% m/m while nondurable good output rose a more modest 0.3% m/m.

In the special classifications, factory output of selected high technology industries fell 0.3% m/m in April, the first monthly decline since August 2021, after a 1.4% m/m gain in March. Factory production excluding the high technology sector increased a solid 0.8% m/m, the same monthly increase as in March. Manufacturing production excluding both high tech and motor vehicles rose 0.6% m/m in April after a 0.3% m/m increase in March.

Capacity utilization rose to 79.0% in April, the highest level since December 2018, from 78.2% in March (revised from 78.3%). A 78.6% rate had been expected. Utilization in the factory sector rose to 79.2% in April, the highest reading since April 2007, from 78.6% in March (revised from 78.7%).

Industrial production and capacity are located in Haver's USECON database. Additional detail on production and capacity utilization can be found in the IP database. The expectations figures come from the AS1REPNA database.

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