Fed: Factory Output Rises, Car Production up 7.8%

U.S. factory production rose by 0.9% in March, marking the third consecutive month of gains, Bloomberg reported Friday (April 15).

Data from the Federal Reserve showed that this increase included a 7.8% jump in automobile production, with carmakers putting out 9.75 million vehicles, the highest number in months.

The report also showed production of business equipment rising 1.8% last month, as well as a 0.4% increase in utility output and a 1.7% gain in mining. Oil and gas well drilling advanced another 4.8% and was up 53.7% from a year earlier.

Read more: US Factory Production Drops as Auto Industry Struggles

The Fed says total industrial production, including utility and mining, rose 0.9 percent during March, with manufacturing output increasing at an annual rate of 5.4% for the first quarter and total production rising at an annualized rate of 8.1%.

Capacity utilization rose to 78.3 percent, a rate that is 1.2 percentage points short of its long-run average, from 1972 to 2021.

Read also: Prices Surge 8.5% in March, Highest in 40 Years

The March increase comes on the heels of a 1.2% increase in February, representing an uptick in production following a surprise drop at the end of 2021, which was fueled in part by a decline in car production due to the semiconductor shortage.

Earlier this week the Bureau of Labor Statistics released a report showing consumer prices showing that consumer prices had risen 8.5% in March versus 2021, the largest surge in 40 years. Prices rose 1.2% in March, following hopes that inflation was beginning to drop.

“The expectation going into this year was that we would basically see inflation peaking in the first quarter, then maybe leveling out,” Fed Chairman Jerome H. Powell said in March. “That story has already fallen apart. To the extent that it continues to fall apart, my colleagues and I may well reach the conclusion that we’ll need to move more quickly.”