WASHINGTON | Wed May 16, 2012 9:17am EDT
(Reuters) – Industrial production posted its fastest growth in over a year in April, boosted by surging output at utilities and a rebound in manufacturing, the Federal Reserve said on Wednesday.
Industrial output grew 1.1 percent last month, the most since December 2010 and nearly twice the pace expected by analysts polled by Reuters.
The Fed also revised its estimates for prior months, saying production contracted 0.6 percent in March and expanded 0.4 percent in February. The Fed previously said production was flat in February and March.
In April, manufacturing output rose 0.6 percent, bouncing back from a 0.5 percent decline in March. A big increase in vehicle production factored in the gains, with output for motor vehicles and parts up 3.9 percent.
Still, the advance in factory output was broad based. Outside vehicles and parts, manufacturing increased 0.3 percent.
Utilities output increased 4.5 percent. Unseasonably warm weather in the first quarter previously had held down demand for heating, the Fed said.
Capacity utilization, a measure of how fully firms are using their resources, rose to 79.2 percent, the highest since April 2008.
Officials at the Fed tend to look at utilization measures as a signal of how much “slack” remains in the economy – how far growth has room to run before it becomes inflationary.