Prior Prior Revised Consensus Actual
Production - M/M change 0.5 % 0.4 % 0.4 % 1.0 %
Manufacturing - M/M -0.4 % 0.3 % 1.0 %
Capacity Utilization Rate - Level 76.1 % 76.3 % 76.7 %
The manufacturing sector did in fact surge during April, to more than reverse contraction in March. Industrial production rose a stronger-than-expected 1.0 percent with the manufacturing component, after falling 0.4 percent in March, also up 1.0 percent. These are the strongest monthly gains for both of these readings since February 2014.
Gains are spread throughout the manufacturing sector led by motor vehicles where volumes surged 5.0 percent in the month. And business equipment, in a positive indication for second-quarter business investment, rose a very sharp 1.2 percent. Production of consumer goods was even stronger, up 1.5 percent. Two negatives are hi-tech industries with a small decline and also construction supplies which posted a second straight dip that offers a reminder of this morning's disappointing housing starts report.
Turning back to positives, mining is a major strength of April's report, up 1.2 percent to more than reverse March's 0.4 percent decline. Utility output is another positive, up 0.7 percent on top of March's weather-related 8.2 percent record surge.
April is proving an uneven month for economic data, led on the positive side by this report and the monthly employment report but offset by weakness in retail sales, housing starts, and consumer inflation. But for manufacturing, today's news is very positive and helps vindicate what has been a long run of very strong signals from regional reports including the Philly Fed. Last year was dead flat for manufacturing but this year, especially after this report, looks for now to be solidly positive. Watch for May's Philly Fed report on Thursday.
Source: Bloomberg
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