Factory output in the United States increased in March at a rate in line with expectations as manufacturing and mining logged gains, according to Federal Reserve data released on Tuesday.
Industrial production was up 0.4% in March, holding steady from February’s revised figure, the Fed said in a statement.
In particular, manufacturing output gained 0.5% last month, hovering at 0.8% above the level a year earlier.
This was helped by a 3.1% gain in motor vehicles and parts, said the report.
The index for mining was down 1.4%, while utilities was up 2.0%.
Pantheon Macroeconomics noted there was "little change in manufacturing hours worked and a small fall in railcar shipments."
Rubeela Farooqi, chief U.S. economist at High Frequency Economics, added that the manufacturing sector "continues to face headwinds from higher borrowing costs and tighter credit conditions."
While the Fed has signaled it could start cutting interest rates this year, Farooqi warned that a delay in the reductions could "be a constraint for factory activity in the near term."
But she expects that lower interest rates subsequently and a build-up of supply networks should help factory activity in 2024.
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