March Industrial Production Rose 0.4%%

We got more promising economic news this morning. The government reported that industrial production rose by 0.4% last month. While total production was up, factory production unexpectedly dropped by 0.1%.

The median estimate for total industrial production of the 82 economists surveyed by Bloomberg called for a 0.2 percent gain. Projections ranged from a drop of 0.5 percent to an increase of 0.7 percent. The prior month was revised up to a 1.1 percent increase from a previously reported 0.8 percent advance.

Manufacturing, which makes up 75 percent of total production and accounts for about 12 percent of the economy, was restrained by declines in production last month of metals, computers, electrical equipment and furniture.

One of the bright spots in March was auto making. The output of motor vehicles and parts increased 2.9 percent after a 2 percent gain a month earlier, today’s report showed. Excluding autos and parts, manufacturing production dropped 0.3 percent, the biggest decline since October, after a 0.8 percent rise.

Cars and light trucks sold at a 15.2 million annual pace in March, capping the strongest three months for purchases since early 2008, data from Ward’s Automotive Group showed.

Here’s the chart on industrial production. There are two things to notice: the index hasn’t yet reached a new peak, and the index correlates very well with the economic cycle.

fredgraph04162013

Posted by on April 16th, 2013 at 10:46 am


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