Industrial Production decreased by its slowest pace in six months in April, falling 0.5%, as expected, after a 1.7% contraction in March. Annually, total output has fallen 12.5%.
Production in manufacturing fell 0.3% in the month, marking a 16.0% decline since its December peak.
"One could say that the auto industry had its tire tracks all over the report, but it was not just cars," said Jennifer Lee, economist at BMO Capital Markets. "The weakness was widespread, from business equipment to construction."
Mining output fell 3.2%, utilities output moved up 0.4%, and total industrial production minus cars and parts contracted 0.6%.
Capacity Utilization ― a measure of slack in the economy ― fell further to 69.1% percent, creating yet another new low in the four-decade history of the index.
Earlier on Friday, the Empire State Survey suggested manufacturing conditions in New York are contracting much slower than anticipated for May. The reading climbed to its highest reading since August at -4.6, following a -14.7 score in April and a record-low -38 in March.
TD economics strategist Ian Pollick called the New York survey “another strong report,” noting it was “a nice surprise to the market.”
Looking ahead, he said there are encouraging signs for manufacturing output. “The unambiguous strength in the report implies that while the manufacturing sector continues to struggle, a slow claw-back is in motion. In all likelihood, the manufacturing sector will continue to be affected by the broader economic slowdown as aggregate demand remains depressed, though it is encouraging to see such a nice pickup.”