Industrial production held steady in April after a 0.7% in March. The 1.7% jump in utilities production and 0.8% increase in mining output offset the 0.4% decline in factory production. The 8.9% decline in auto output was the major reason for the flat headline. Excluding motor vehicle output, factory production rose 0.2% in April after a 0.3% gain in the prior month.

The decline in auto production is related to supply issues related to the natural disaster in Japan. In addition to a drop in auto output, other components also recorded declines - primary metals (-1.9%), electrical equipment (-2.5%, furniture (-1.0%). Offsetting these output losses were gains in computer and electronic products (+1.1%), machinery (+0.2%), and fabricated metal products (+0.4%).

The operating rate of the nation's factories edged down to 74.4% in April from 74.8% in March. The long-term average of the operating rate is 80.6%. Comparing to this average, the nation's factories are humming along with a significant amount of slack.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com
Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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