March Industrial Production

In March, according to the Federal Reserve, our nation’s industrial production (IP) rose 0.8%, following on the 0.1% February increase which was revised from a 0.1% decrease we originally reported.  Utilities climbed out of the prior month’s hole with a 1.7% gain, while mining built on the 0.3% February increase (revised from +0.8%) by adding another 0.6%.  Manufacturing grew at a robust 0.7% after February was revised up from a 0.4% gain to 0.6%.  Year-over-year IP has risen by 5.9%, an increase over the 5.6% gain seen in February, and a very encouraging number for this segment of our overall economy.

The output of durable goods, longer lasting stuff like cars, rose a full one percent thanks to a 3% gain from motor vehicles and parts.  It still showed a respectable 0.6% increase without them.  The non-durables category which includes such items as chemicals or paper rose 0.5% in March.

Capacity utilization, a gauge of how fast our nation’s productive output is being generated, increased 0.6% to 77.4% (after February was revised up one-tenth).  While this is the fasted rate we have seen since July of 2008, it still falls well below the 80.4% long-term average rate seen from 1972 through 2010, suggesting strongly that, despite the rise in food and energy costs and many informed opinions to the contrary, inflation will be held at bay for some time to come.