USA manufacturing rose in April for the first time in three months, indicating a respite for the industry after a one-year slump.
Advertisement
Last month, production of long-lasting manufactured goods increased 0.6 per cent.
U.S. factory output expanded in April as makers of machinery and cars posted solid increases in production, a sign that the country’s manufacturing sector was resisting the downward pull from sputtering global growth. That marked the biggest jump for a single month since November 2014. Demand for electricity and natural gas returned to more normal levels after unusually mild March weather.
Total factory output, the largest portion of production, rose by 0.3% in April.
The output of motor vehicles and parts rebounded in April by 1.3 percent.
Utilities drove the increase, boosting output by almost 6% to respond to higher demand for electricity and natural gas. The dollar, which surged in 2014 and 2015, has been falling against major currencies since January. A decline in the dollar this year will help provide some relief going forward for export-oriented factories.
Mining production, which includes oil and gas well drilling, decreased 2.3 percent. Coal producers have also cut back in the face of lower-price competition from natural gas.
The gain in factory output, coming after recent strong retail sales data, bolsters the view that the USA economy could re-accelerate in the second quarter after growing sluggishly in the first three months of the year.
Advertisement
The Fed also said capacity utilization for the industrial sector climbed to 75.4 percent in April from a revised 74.9 percent in March. The numbers looked good on the surface, but this still suggests that overall economic growth remains subdued. Remaining hurdles includes still-soft overseas markets and USA businesses’ efforts to bring inventories more in line with a recent weakening in sales. But employers added just 160,000 jobs in April, the fewest since September.
