U.S. industrial production rose sharply in April, a sign of underlying strength in the economy.
Industrial production--a measure of output at factories, mines and utilities--jumped 1.0% from a month earlier, the Federal Reserve said Tuesday. That was the largest gain in more than three years.
Economists surveyed by The Wall Street Journal had expected the index to climb 0.4%. Output in March rose a revised 0.4%.
Capacity use, a measure of slack in the economy, increased 0.6 percentage point to 76.7%. Economists had expected 76.3%.
Capacity use remains below the long-run average of 79.9%, a sign the economy is operating below its potential.
Manufacturing output, the biggest component of industrial production, also posted its strongest gain in more than three years, pushing the index level to a new postrecession high. The index climbed 1.0% in April. April manufacturing output was up 1.7% from the same month a year earlier.
U.S. factory activity was stagnant through much of 2016 but picked up a little early this year amid steady job creation, stronger demand from overseas and soaring optimism following the election of President Donald Trump.
In April, the auto industry and food manufacturers helped drive the sector.
The Institute for Supply Management earlier this month said its closely watched index of U.S. manufacturing activity fell in April but still indicated the sector was expanding. ISM manufacturing readings for each month this year have been higher than any month in 2015 or 2016.
Tuesday's report showed output in the volatile mining sector advanced 1.2% in April. The mining index, which includes oil and natural gas extraction, was up 7.3% from a year earlier. The sector had been weighed down by weak commodity prices but appears to be rebounding.
Utility output rose 0.7% from the prior month but was down 0.5% from a year earlier. Utility use is typically more a reflection of the weather than economic vigor.
The Federal Reserve's report on industrial production can be found at: https://www.federalreserve.gov/Releases/g17/current/default.htm.
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(END) Dow Jones Newswires
May 16, 2017 09:30 ET (13:30 GMT)