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U.S. Industrial Production Rose for Third Consecutive Month in March

U.S. industrial output rose in March for the third straight month driven by a rebound in motor-vehicle production, in a sign that the manufacturing sector kept growth momentum despite persisting supply bottlenecks and high costs.

Industrial production–which includes factory, mining and utility output–increased at 0.9% in March compared with the previous month, data from the Federal Reserve showed Friday, unchanged from a revised 0.9% on-month rise in February.

Economists polled by The Wall Street Journal expected industrial output to grow 0.4% on month. Industrial production rose at an annualized rate of 8.1% for the first quarter, the Fed said.

March’s gains were driven by a 0.9% increase in manufacturing output, which is the biggest component of industrial production. The pickup was broad-based, led by a 7.8% monthly increase in production of motor vehicles and parts. Excluding the large gain in the auto sector, factory output increased 0.4%.
Strong demand for goods from businesses and consumers keeps factories humming across the U.S., but problems in supply chains and higher costs for raw materials and components hamper industrial activity.
Surveys to the manufacturing sector and real-time data signaled a slight improvement in supply chains at the beginning of the year, but further disruptions from lockdowns in China and the war in Ukraine have the potential to unravel any progress made, economists say.

Utilities output rose 0.4% in March on month, reflecting an increase of 0.9% for electric utilities that was partly offset by a drop of 2.9% for natural gas utilities. Mining output increased 1.7% boosted by the strength in the oil and gas sector, the Fed said.

Capacity utilization, which reflects how much industries are producing compared with what they could potentially produce, rose by 0.6 percentage points to 78.3% in March. Capacity at the key manufacturing sector increased by 0.6 percentage points to 78.7%.
Source: Dow Jones

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