The FINANCIAL — U.S. industrial production fell for the fifth consecutive month in April, suggesting weak global demand, a stronger dollar and lower oil prices continue to limit output, according to Nasdaq.
Industrial production, which measures the output of U.S. manufacturers, utilities and mines, decreased a seasonally adjusted 0.3% from the prior month, the Federal Reserve said on May 15.
Capacity utilization, a measure of slack in the industrial sector, fell four-tenths of a percentage point to 78.2% in April. At its current level, capacity utilization was slightly below its long-run average recorded since 1972.
Economists surveyed by The Wall Street Journal had forecast a 0.1% decline in industrial production and a capacity utilization rate of 78.3%.
Overall industrial output in April was up 1.9% from a year earlier. U.S. industrial production had been mixed through the second half of the year, before dropping off in December. For the first quarter of 2015, industrial production posted the first quarterly decline since the recession ended.
March’s industrial production reading was revised to a 0.3% decline from a 0.6% fall. But February’s gain of 0.1% was revised lower to a 0.1% decline.
Weaker industrial production is consistent with an economy that has been slowing this year. Consumer spending has stalled and business investment, especially in the energy sector, has dropped off. Economists now estimate economic output shrunk by as much as 1% in the first quarter, and hopes for a spring rebound are dimming.
Manufacturing output, which accounts for about three-quarters of overall industrial production, was unchanged in April. A small increase in the production of long-lasting durable goods, including wood products, appliances and motor vehicles, was offset by a small decrease in nondurable goods like food, beverages and tobacco products, the Fed said.
March’s manufacturing figure was revised up to 0.3%, from a previously reported gain of 0.1%.
Mining output, the next-biggest component of industrial production, fell by 0.8%, the fourth straight monthly decline. The category is up 1.3% from a year earlier.
The drop off in mining output largely reflect a sharp decline in oil and gas drilling, which fell by 14.5% last month and is down 46.5% from a year ago. The oil and gas industry, a mainstay through much of the recovery, has faced plummeting crude oil prices brought on by rising supplies.
The final component of industrial production, which measures utility output, decreased by 1.3% in April, after falling 5.4% in March, when temperatures across much of the country began to thaw following an unseasonably cold winter.
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