The numbers: U.S. industrial production rose 0.5% in April after two flat months, the Federal Reserve reported Tuesday.
The gain in April was above expectations of a 0.1% gain, according to a survey by The Wall Street Journal, but enthusiasm was tempered by downward revisions to both February and March.
Capacity utilization rose to 79.7% in April from a revised 79.4% in the prior month.
The reading was in line with economists forecasts.
Key details: Manufacturing output jumped 1% in April after a 0.8% drop in the prior month.
Motor vehicles and parts output rose 9.3% after a 1.9% decline in the prior month. Excluding autos, manufacturing was up 0.4%.
Business equipment rose 1.2%, almost reversing a 1.4% drop in March.
Utilities output fell 3.1% in April after an 8.4% gain in the prior month.
Mining output, which includes oil and natural gas, rose 0.6% after a 1.3% decline in March.
Big picture: In general, Federal Reserve regional surveys of manufacturing have been trending lower, pointing to weakness in business investment. The Empire State index plummeted to negative 31.8 in May from 10.8 in the prior month.
What are they saying? “Overall, we still think that renewed falls in manufacturing output are likely over the coming month,” said Andrew Hunter, deputy chief economist at Capital Economics.
Ryan Sweet, chief U.S. economist at Oxford Economics: “The new industrial production and retail sales, released earlier today, lend noticeable upside risk to the forecast for Q2 GDP to rise 0.6% at an annualized rate. “
Market reaction: Stocks
DJIA,
SPX,
opened lower on Tuesday, while the yield on the 10-year Treasury note
TMUBMUSD10Y,
rose to 3.54%.
This story originally appeared on Marketwatch
