U.S. industrial production grew at the highest rate in more than three years in April, with all three major industry groups showing gains.
The Federal Reserve said the combined output of factories, mines and utilities jumped 1.0% from a month earlier, easily beating economists’ estimates of a 0.4% gain.
It was the third straight monthly increase in industrial production, following gains of 0.4% in March and 0.2% in February.
According to The Wall Street Journal, the trend is a sign of underlying strength in the economy. “Manufacturing has recovered from a rough patch in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar, which makes U.S. goods costlier in foreign markets,” The Associated Press noted.
At 105.1% of its 2012 average, total industrial production in April was 2.2% above its year-earlier level.
Manufacturing output, the biggest component of industrial production, posted its biggest gain in more than three years, rising 1.% to a new post-recession high. April manufacturing output was up 1.7% from the same month a year earlier.
“U.S. factory activity was stagnant through much of 2016 but picked up a little early this year amid steady job creation, stronger demand from overseas and soaring optimism following the election of President Donald Trump,” the WSJ said.
The Fed said the improvement in factory output in April was driven by a large advance for autos and parts and gains for food, beverages and tobacco products.
After falling 0.4% in March, mining rebounded with a 1.2% gain last month, largely due to pickups in coal mining and in drilling and support activities. Utilities output climbed 0.7% as warmer-than-normal weather boosted air-conditioning usage and electric power generation.
The Institute for Supply Management earlier this month said its closely watched index of U.S. manufacturing activity fell in April but still indicated the sector was expanding. ISM manufacturing readings for each month this year have been higher than any month in 2015 or 2016.