Rising oil prices are expected to lead to more U.S. energy production in coming months.
The numbers: Industrial production rose 0.7% in April, the Federal Reserve said Wednesday. The gain was slightly above Wall expectations of a 0.6% increase. There was a mix of revisions to the prior two months that were downward on net. Still, output rose at a 2.3% rate in the first quarter. Capacity utilization rose to 78 in April, a three-year high.
What happened: Manufacturing output rose 0.5% in April after a flat reading in March. Motor vehicle output fell 1.3%. Mining output, which includes oil and gas production, rose 1.1% while utility output was up 1.9%. In April, the rise in industrial production was supported by increases in every major market group.
Big picture: American factories, mines and oil wells are hopping, economists said. While there is some concern about signs the global economic upswing seen since the fourth quarter may have peaked, the outlook for the U.S. manufacturing sector is still bright, in part because rising oil prices will lead to more U.S. production.
Market reaction: Not much immediate movement after the report was released. The Dow Jones Industrial Average DJIA, -0.78% was fighting for direction with the focus on new difficulties in planning an upcoming summit between the U.S. and North Korea.
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