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Spokane, Washington  Est. May 19, 1883

U.S. industrial output rose a modest 0.7% amid shortages

This photo from March 24, 2021, shows a General Motors assembly plant in Wentzville, Mo. U.S. industrial production increased for a second straight month in April as more factories came online after being shutdown by winter ice storms.  (Associated Press)
By Christopher Rugaber Associated Press Associated Press

WASHINGTON – U.S. industrial production increased for a second straight month in April as more factories came online after being shut down by winter ice storms.

Industrial production – which includes output at factories, mines and utilities – rose 0.7% last month, down from a sharp increase of 2.4% in March, the Federal Reserve reported Friday. The March gain, however, was revised sharply higher from an initial estimate of a 1.4% rise.

Manufacturing output climbed 0.4%, down from a strong 3.1% in March that was also revised higher.

Strong consumer demand from Americans flush with cash after a series of stimulus checks is encouraging more output, but shortages of semiconductors and raw materials such as copper are pushing in the other direction and holding it back.

Auto production fell 4.3% in April, largely because car makers can’t find enough semiconductors. But the output of computers, electrical equipment and appliances, machinery, and metals such as steel all increased.

“Recovery in industrial output, especially manufacturing, is ongoing and is likely to remain supported by still-strong demand for goods,” said Rubeela Farooqi, chief economist at High Frequency Economics. “But supply chain bottlenecks are an ongoing headwind in the near term.”

Utility production climbed 2.6%, after a sharp drop in March. Mines lifted production 0.7% last month.

The U.S. economy is expanding at a healthy clip as consumers become more confident and states and cities relax restrictions on businesses. Growth was 6.4% at an annual rate in the first three months of the year and economists forecast the expansion could accelerate to a double-digit pace in the April-June quarter.

Still, there are signs that Americans are switching some of their spending away from goods to services, as restaurants, movies, and other entertainment venues open up. Retail sales for April were flat, according to a separate report Friday, though sales at restaurants and bars rose 3%.