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U.S. Industrial Production Advances Much More Than Expected In March

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Partly reflecting a spike in the output of motor vehicles and parts, the Federal Reserve released a report on Friday showing U.S. industrial production increased by much more than expected in the month of March.

The report showed industrial production advanced by 0.9 percent in March, matching the upwardly revised increase in February.

Economists had expected industrial production to rise by 0.4 percent compared to the 0.5 percent growth originally reported for the previous month.

Manufacturing output climbed by 0.9 percent in March after jumping 1.2 percent in February, largely reflecting a 7.8 percent surge in the output of motor vehicles and parts. Factory output elsewhere moved up 0.4 percent.

"The U.S. will not be immune to the global slowdown in manufacturing underway led by China but, for now at least, easing supply constraints are keeping growth in the factory sector strong," said Michael Pearce, Senior U.S. Economist at Capital Economics.

The Fed said mining output also shot up by 1.7 percent in March after surging by 1.3 percent in February, while utilities output rose by 0.4 percent after slumping by 1.0 percent in the previous month.

The report also showed capacity utilization in the industrial sector increased to 78.3 percent in March from an upwardly revised 77.7 percent in February.

Economists had expected capacity utilization to inch up to 77.8 percent from the 77.6 percent originally reported for the previous month.

Capacity utilization in the manufacturing and mining sectors climbed to 78.7 percent and 79.6 percent, respectively, while capacity utilization in the utilities sector crept up to 75.1 percent.

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