Industrial Production Unexpectedly Rises

U.S. industrial production for factories, mines and utilities unexpectedly rose 0.4% in March, the first jump in six months, a report by the Federal Reserve showed Tuesday.

Bloomberg reported that analysts were warning against taking too much hope from one report. Still, it is a positive sign about the overall health of the economy after months of almost relentless negative news from industry.

And this is especially important to trucking companies, since the manufacturing sector is their biggest customer group.

Two other government reports released Tuesday also appeared to offer hope about the state of the economy.



he Commerce Department said housing starts fell only 1.3% during March after a 2.2% fall the month before. This modest drop suggests the home building industry is still reasonably confident about prospects in the coming months, Reuters reported.

The housing report is closely watched by several different segments of the trucking industry, including flatbed carriers that haul construction materials. In addition, a fall in housing starts signals less future demand for van freight like household appliances and furniture.

The Labor Department said consumer prices rose 0.1% last month, the smallest jump in seven months. This is the most closely watched gauge of U.S. inflation, so analysts immediately pointed out this should give the Federal Reserve more latitude to keep lowering interest rates to rejuvenate economic growth, the Associated Press reported.

The industrial production report proved to be the biggest surprise Tuesday, as most analysts were expecting a slight decrease rather than the 0.4% gain.

The main reasons for the jump were that car and truck production rose 9.4% in March, and vehicle parts production rose 4.6%.

Manufacturing output alone rose 0.3% during the month, after falling by that same amount in February.

The overall rate of capacity utilization use, which measures how much of available industrial capacity is actually being used, rose 0.1% to 79.4% in March for its first increase since August. For just the factory component without counting mines and utilities, the use rate was down 0.1% to 78.1%.

Commerce said groundbreaking for new homes and apartments reached a seasonally-adjusted rate of 1.613 million units in March. That is 1% below last year’s levels.

Starts gained in the Northeast and West, but contracted in the South and Midwest.

Meanwhile, the Labor Department said a decline in energy prices limited the rise in consumer prices in March.

Prices for “core” goods -- which exclude the food and energy -- rose 0.2%, after a 0.3% increase in February.

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