Automakers Drive U.S. Factory Output Higher in April

manufacturing autos carsBy MARTIN CRUTSINGER

U.S. factory output increased in April, helped by a gain in auto production. Busier factories have driven stronger hiring this year and helped the economy grow.

The Federal Reserve said Wednesday that factory production rose 0.6% in April, erasing a 0.5% decline in March.

Half of the April increase reflected a 3.9% jump in the production of motor vehicles and parts. That's the fifth consecutive gain at auto plants and the biggest rise since January.

Overall industrial production increased 1.1% in April. In addition to the big gain at factories, output at mines and utilities both showed strong gains.

Factory output has risen 18.3% since it hit a low in June 2009, the month the recession ended. Through the first three months of the year, it was growing at an annual rate of nearly 10%.

Paul Ashworth, an economist at Capital Economics, said the report is a good sign that "the U.S. economy, for now at least, is shrugging off the euro-zone crisis and the slowdown in China."

The 1.1% rise in overall industrial production was the largest one-month gain since December 2010. However, analysts said much of the increase reflected a 4.5% jump in utility production, which was influenced by mild weather earlier this year. The warmer winter had lowered March utility output. Heating demands returned to more normal levels in April, driving utility output higher.

The manufacturing gains were broad-based. In addition to increases in auto output, production rose at a wide range of companies, from makers of computers and electronics to aerospace and furniture factories.

Other data suggest factory output is strengthening.

The Institute for Supply Management, a trade group of purchasing managers, said manufacturing activity grew in April at the fastest pace in 10 months. New orders, production and a measure of hiring all rose.

And the Federal Reserve Bank of New York said manufacturing activity in that state jumped in May, reversing a large drop in April. Measures of new orders and employment rose.

Faster output at U.S. factories has been a key reason employers have added 1 million jobs in the past five months.

Manufacturing companies have added 167,000 jobs in that stretch. That's roughly 17% of the job gains, even though manufacturing represents less than 10% of the economy.

Factories are cranking out more goods because consumers are more confident in the economy and spending more.

Consumer spending grew at an annual rate of 2.9% in the first three months of the year, the fastest pace since late 2010. However, some of that strength was aided by a mild winter, which boosted sales in February and March.

In April, retail sales grew by just 0.1%. But sales of autos, furniture, electronics and appliances rose. All are big-ticket items made in factories that help drive growth.

The economy grew at an annual rate of 2.2% in the January-March quarter. That's slower than the 3% growth in the October-December quarter, but better than the 1.7% growth for all of last year.

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GM makes a lot of cheap junk compared to others.....everything starts breaking down as soon as it is out of warranty, so they can charge you for expensive parts and repairs... a big rip off... never will I buy a GM product again... it'a all bling.

May 17 2012 at 8:02 AM Report abuse rate up rate down Reply

Obama saved GM and killed Bin Laden. Romney would have killed GM and .... Nuff said.

May 16 2012 at 1:24 PM Report abuse -4 rate up rate down Reply
1 reply to chris1011's comment

Obama didn't kill Bin Laden the Navy Seals did. Obama was a useless bystander. GM still owes billions to the taxpayers.

The copy and paste poster child strikes again.

Obamasa fiasco

May 16 2012 at 1:50 PM Report abuse +3 rate up rate down Reply
3 replies to democracks0's comment