Partly reflecting a substantial rebound in utilities output, the Federal Reserve released a report on Tuesday showing a slightly bigger than expected increase in U.S. industrial production in the month of March.
The report said industrial production climbed by 0.5 percent in March after surging up by a revised 1.0 percent in February.
Economists had expected production to increase by 0.4 percent compared to the 1.1 percent jump originally reported for the previous month.
The bigger than expected increase in production was partly due to the rebound in utilities output, which spiked by 3.0 percent in March after tumbling by 5.0 percent in February amid warmer-than-normal temperatures.
Mining output also surged up by 1.0 percent in March after soaring by 2.9 percent in February, with the continued increase reflecting gains in oil and gas extraction and in support activities for mining.
Meanwhile, the Fed said manufacturing output inched up by just 0.1 percent in March following the 1.5 percent jump seen in the previous month.
“The outlook remains positive given the robust domestic economy and a competitive exchange rate that allows U.S. exporters to really benefit from the upturn in global demand,” said James Knightley, Chief International Economist at ING.
He added, “However, trade tensions remain a clear risk while problems obtaining commodities (aluminum market in particular following an extension of Russian sanctions) could create bottle necks in the near term.”
The report also said capacity utilization in the industrial sector rose to 78.0 percent in March from 77.7 percent in February. Capacity utilization had been expected to inch up to 77.9 percent.
Capacity utilization in the manufacturing sector edged down to 75.9 percent, while capacity utilization in the utilities and mining sectors climbed to 79.0 percent and 90.1 percent, respectively.