Industrial production in the U.S. rose by more than expected in the month of March, the Federal Reserve revealed in a report on Wednesday, with the report also showing a notable upward revision to the pace of production growth in the previous month.
The report said industrial production increased by 0.7 percent in March after surging up by an upwardly revised 1.2 percent in February.
Economists had been expecting production to rise by about 0.5 percent compared to the 0.6 percent increase originally reported for the previous month.
The Fed said the much stronger than previously reported increase in February primarily reflected stronger gains for durable goods manufacturing and mining.
Additionally, the report showed that the production growth in March was partly due to a 1.5 percent jump in mining output, which followed a 0.9 percent increase in the previous month.
Utilities output also surged up by 1.0 percent in March after falling by 0.3 percent in February, while manufacturing output rose by 0.5 percent after soaring by 1.4 percent.
"The U.S. economy is now showing its true colors after the weakness triggered by the bleakest of winters," said Paul Dales, Senior U.S. Economist at Capital Economics. "There is scope for production to rise rapidly in the coming months too."
The report also showed that the capacity utilization rate climbed to 79.2 percent in March from 78.8 percent in February. Capacity utilization had been expected to dip to 78.7 percent.
Capacity utilization in the manufacturing sector rose to 76.7 percent, while capacity utilization in the mining and utilities sectors climbed to 89.1 percent and 85.0 percent, respectively.
Jay Morelock, an economist at FTN Financial, said, "Capacity utilization has averaged about 80% since 1980, but has rarely crossed the 80% threshold over the past decade."
"Pushing utilization above 80% should add jobs and would represent a meaningful recovery in the manufacturing industry," he added.
Later today, the Fed is scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions from each of the twelve Fed districts.
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