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The Fed: U.S. industrial output up 0.7% in April, despite drag from autos

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The numbers: U.S. manufacturing output rose 0.7% in April , the Federal Reserve said Friday.

Economists polled by the Wall Street Journal had forecast industrial output rising 0.8% in April.

Production rose a revised 2.4% in March, up from the initial estimate of a 1.4% gain.

What happened: Motor vehicles and parts output fell 4.3% in April. Excluding autos, industrial output increased 0.9%.

Offsetting this weakness were gains in chemical materials and consumer energy products.

Some of the strength in April came from a return to operation of plants in Texas that were damaged by the severe winter weather in February.

Production at factories increased 0.4% in April, down from the strong 3.1% rise in the prior month.

Utilities output rose 2.6% in April. Mining output, which includes oil and natural gas, rose 0.7%.

Capacity utilization for the manufacturing sector, a measure of slack in the economy, rose to 74.9% in April from 74.4% in March. The April rate is 4.7 percentage points below its long-run average.

Big picture: Production remained healthy despite supply-chain issues. For instance, the global shortage of semiconductor chips has hurt the auto sector. The sector’s production remains 2.7% below its pre-pandemic level.

Market reaction: U.S. stocks opened higher Friday in a bid to extend the previous session’s bounce at the end of a volatile week. The Dow Jones Industrial Average
DJIA,
+0.83%

 was up 216 points, or 0.6%, at 34,237, while the S&P 500 
SPX,
+1.14%

 rose 34 points, or 0.8%, to 4,146.

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