Industrial production reached a record high in the United States in April. Bloomberg reported that production volume outpaced expectations with a 1.1% increase in MoM (month-over-month) growth.
A Market Watch report shows this gain came against an expectation of a 0.5% increase. ZeroHedge reports this is the biggest jump since October 2021.
This jump follows a 0.9% MoM growth in March and is part of an overall 4-month streak of increases.
ZeroHedge economists also report that capacity utilization is the highest since December 2018, and manufacturing rose 0.8% MoM to 79%.
Capacity utilization indicates how well industries produce goods compared to the rate they could potentially produce.
Despite ongoing issues with the supply chain and higher costs due to inflation, several areas of the economy are still booming, leading to a fourth straight month of increased production.
Fed data obtained by Market Watch shows the production of motor vehicles played a starring role in the increased manufacturing output.
The automobile portion of the manufacturing sector grew by 3.9%. Market Watch economists say this data indicates that the bottle-neck created by supply chain issues continues to ease.
Gains were reported in the utilities and mining sectors as well.
Fed data shows utilities output rose 2.4% in April. Market Watch says this is likely due to slightly cooler temperatures for the month, leading to higher natural gas and electricity usage.
The mining sector’s increase of 1.6% was driven by the rise in both oil and gas extraction in response to higher gas prices.
Factory output rose by 0.5% MoM, according to Fed data. Market Watch economists say this data indicates resiliency by the U.S. economy in the face of Pandemic and Supply Chain issues.
One reason for the continued growth in output is a need for businesses to replenish depleted inventories. Supply chain disruptions have caused a considerable demand for goods. Market Watch says the continued fighting in Ukraine and COVID-related closures in China could hamper the global supply chain.
Bloomberg reported on May 17 that retail sales in April also reflected strength across merchant categories.
Market Watch economists say the Fed’s current tightening of U.S. financial policy could adversely impact demand for goods. Still, the need to process backlogs should keep production up in the short term.