Production sector shows strength
WASHINGTON — U.S. industry headed into the spring with a full head of steam: Production at factories, mines and utilities rose by 0.6 percent in March in the latest encouraging sign for the economy.
The snapshot of industrial activity, released by the Federal Reserve on Friday, comes on the heels of other positive economic barometers.
Consumers — a key ingredient of the country’s economic health — are keeping cash registers busy, and businesses are ramping up hiring, according to recent government reports.
The solid increase in industrial production in March came after a 0.5 percent advance in February and was the largest since December. The showing was better than economists were expecting.
“The economy is becoming a well oiled machine,” said Joel Naroff, president of Naroff Economic Advisors.
Industrial strength in March was broad-based. Machinery, clothing, consumer appliances, furniture and carpeting, and business equipment all posted production gains. Even the struggling automotive sector saw some improvement. That swamped some weakness in home electronics, textiles and elsewhere.
Economists believe economic growth for the January-March quarter will clock in at a brisk pace of 4.5 percent or higher. The government will release first-quarter figures at the end of the month.
In the current April-to-June quarter, the economy is expected to moderate to a pace in the range of 3 percent, which would still represent good growth, analysts said.
With the economy solidly chugging ahead, the Federal Reserve and other economists are being especially watchful for any signs that inflation may flare up.
The Federal Reserve boosted a key interest rate to a five-year high on March 28, the latest in a series of rate-raising moves since June 2004 to keep inflation in check. Many analysts expect another rate increase on May 10, the Fed’s next meeting. Some economists also believe rates will go up gain in June.
The proportion of overall industrial capacity in use climbed in March to 81.3 percent, the highest since September 2000, the Fed report showed.