US industrial production rebounded more than projected in April, buoyed the manufacturing and utilities categories, Federal Reserve data showed Friday.
Industrial output rose 0.7% last month following a revised 0.3% drop in March, the Fed said. The consensus was for a 0.3% increase for April in a survey compiled by Bloomberg.
"The better-than-expected reading of industrial production in April reinforces our baseline forecast for further growth in factory activity this year," Oxford Economics Lead US Economist Bernard Yaros said in a note e-mailed to.
Manufacturing output increased 0.6% last month following a 0.1% gain in March. The durable manufacturing index advanced 1.2%, buoyed largely by a rebound in the motor vehicles and parts component. Nondurable manufacturing turned negative on a monthly basis, according to Fed data.
"Not all was rosy in the April report, and signs of weakness in certain nondurable manufacturing categories such as chemicals, plastics, and rubber could be an early sign of the impact the Iran war is having on these petroleum-based goods," Yaros said.
Utilities output saw a 1.9% increase in April, compared with a decline of 1.4% the month prior, while mining fell 0.1% after a 1.6% decrease, Fed data showed.
"Mining output was slightly lower, as the oil and gas industry has yet to ramp up production in response to higher energy prices, given the uncertain duration of the Iran war," Yaros said.
US President Donald Trump recently rejected Iran's counteroffer to end the war, though a fragile ceasefire between the two countries still holds. The Strait of Hormuz -- the world's most important chokepoint for crude flows -- remains largely shut, sending energy prices soaring. The US-Israel war with Iran started at the end of February.
"The winners and losers in the latest (industrial production) report are likely to persist over the balance of 2026," Yaros said. "Besides supportive fiscal policy, the (artificial intelligence) buildout will continue to lift production of computers and electronics, while an inventory restocking cycle will support new orders growth for factories."
