Production from US factories, mines and utilities unexpectedly dropped in April and businesses ran at a slower operating rate than they did in March, the Federal Reserve said today.
The US central bank said industrial production shrank 0.2 per cent last month, sharply contrary to Wall Street economists' forecasts that it would instead increase 0.2 per cent.
A drop in utility output led the decline, the Fed said, with both electrical and gas utilities trimming their production as warmer weather appeared in much of the country.
The Fed said industrial output grew a revised 0.1 per cent in March instead of the 0.3 per cent gain it had previously reported.
Underlining an apparent slowing in April, the Fed said businesses were operating at 79.2 per cent of their capacity in the month, down from 79.4 per cent in March.
That also fell short of Wall Street forecasts that the operating rate would rise to 79.5 per cent. Output from manufacturing industries was unchanged in April after falling 0.3 per cent in March.
The Fed said production of costly durable goods dropped in April by 2.1 per cent, primarily because of steep declines in output of automotive products as well as appliances, furniture and carpeting.
Separately on Tuesday, the US Commerce Department said housing starts shot up by 11 per cent last month after tumbling 17.6 per cent in March - implying that demand for manufactured items like appliances and furniture also should rebound.
Mining output was flat last month following a 0.5 per cent increase a month earlier. Production by utility companies dropped by a steep 2.3 per cent in April following a 3.6 per cent surge in March.