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US industrial output rises slowly in April: Fed

·1-min read

US industrial production rose in April but was held back by falling auto manufacturing amid the sector's crippling semiconductor shortage, the Federal Reserve said Friday.

The total is far above the same month of 2020, when the economy was largely shut down due to the Covid-19 pandemic, but the data reflect some of the bottlenecks businesses have reported as they struggle to return to normal.

The data also revised March's increase to a 2.4 percent gain, one percentage point higher than originally reported, according to the report.

Total output increased 0.7 percent last month compared to March, in line with expectations, as manufacturing gained a modest 0.4 percent -- held back by a 4.3 percent drop in motor vehicles and parts, the Fed said.

The report said in many industries "results were mixed, with supply chain difficulties possibly hindering production."

Automakers have been forced to slow or shutdown plants amid a worldwide shortage of computer chips.

Oren Klachkin of Oxford Economics blamed the slowing on the supply bottlenecks, but was not overly concerned.

"While supply chain and labor shortages will temporarily increase production and inflation pressures, they won't completely derail the expansion," he said in an analysis of the data.

The report said utilities rose 2.6 percent in April, recovering some of the nine percent drop in the prior month "when unseasonably warm weather reduced demand for heating."

And mining production -- which includes the oil industry -- increased 0.7 percent in April, recovering further from the winter storm that hit output in February.

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