U.S. industrial production remains unchanged for March
Industrial production in the U.S. came in unchanged for the second consecutive month in March, according to a report released by the Federal Reserve, on April 17, with a slight drop in manufacturing output affecting the overall index.
RTT News reported that industrial product remained unchanged in March, mirroring the numbers that were reported for February. Economists had been expecting the report to indicate growth for the month – roughly 0.3 percent according to predictions – but the results showed a continuation of activity from the previous period.
According to the news outlet, the Fed also noted that manufacturing output rose by an annual rate of 10.4 percent in the first quarter, as the year-on-year production levels increased despite the lack of growth for the month of March.
The lack of a sharp rise in output has not raised many eyebrows in the sector, as manufacturing strategy for many companies is geared toward further growth.
"Whilst this data raises the chances of some disappointment in 1Q12 GDP, we don't believe it undermines the notion of gradual recovery in the U.S., including gradual improvements in the labor market," Rob Carnell, chief international economist at ING, told RTT News. "The likelihood is that declining productivity growth will require more labor demand in this pick up than many of the Okun's law calculations that are being thrown around, or that seem to underpin the Federal Reserve's skepticism about further declines in the unemployment rate."
The declines in the capacity utilization rate for February and March were minimal enough to produce a level of concern in the industry, as it only fell 0.2 percent for the most recent reading.
Reuters reported that officials from the Federal Reserve tend to look at these utilization measures and data as a signal of the room for growth in the U.S. economy. This remaining "slack" highlights how further increases in production may occur before inflation will occur.
The slight stagnation in manufacturing has also been attributed to rising gas prices, but positive sentiment remains for the industry.
Manufacturing firms "expressed optimism about near-term growth prospects, but they are somewhat concerned about rising petroleum prices," the Fed said in the report, according to Bloomberg News.