Industrial output drops by 0.7% in April (MarketWatch) (15-05-2008)

WASHINGTON (MarketWatch) - The Federal Reserve reports that U.S. industrial output fell by 0.7% in April on a drop in production of motor vehicles.

Output of factories saw the biggest decline since the disruptions by Hurricane Katrina in September 2005, falling by 0.8%.

Industrial production has risen 0.2% in the past year, and is down 1.2% since January.

The decline in output was worse than the 0.6% drop expected by economists surveyed by MarketWatch and comes after a rise of 0.2% in March.

Capacity utilization - a key gauge of inflationary pressures - fell from 80.4% to 79.7%, the lowest since September 2005 and 1.3 percentage points below the long-run average. Slack capacity typically leads to slower inflation, as producers underbid each other to get work.

Output of high-technology industries rose 1% in April and is up 24.5% in the past year.

Excluding high-tech, manufacturing output fell 0.9%.

  Source MarketWatch