US industrial production rebounded by 0.7% in April, above expectations for a 0.3% increase in a survey compiled by Bloomberg as of 7:30 am ET, and following an upwardly revised 0.3% decrease in March
Manufacturing production increased by 0.6% after a 0.1% increase in the previous month, with a 3.7% gain in motor vehicles and parts. Excluding the gain in motor vehicle production, manufacturing production would have been up 0.3%.
Mining production decreased by 0.1% after a 1.6% drop in March.
Utilities production increased by 1.9% after a 1.4% drop in March.
Capacity utilization increased to 76.1% in April from a 75.7% rate in March, compared with expectations for a smaller increase to a rate of 75.8%.
The monthly industrial production report from the Federal Reserve measures production growth by manufacturers, utility producers and mining operations. The manufacturing data is broken down between products for use in the longer-term (durable) and shorter-term (non-durable), with vehicle production a key component. Also included is capacity utilization, which shows how much spare capacity producers have available.
A stronger-than-expected reading on industrial production is usually bullish for the stock market but may be bearish for the manufacturing, mining or utilities sectors depending on how that portion of the data performed in each month.
Overall, bonds prefer slower industrial production growth as a signal of more modest inflation but in times of tight supply, such as during the pandemic, it is possible to have both sluggish output and rising inflation.