Industrial Output Stalls Out in April

Industrial production fell a weaker-than-expected 0.7 percent in April. Manufacturing was pressured lower by lower motor vehicle assemblies. Utilities registered a small gain while mining output fell. With expectations of reduced consumer & business capital spending, industrial production should continue to trend lower in coming months.

Manufacturing Output Continues to Fall

• Manufacturing output fell 0.8 percent. Half of this decline was attributable to the 8.2 percent drop in motor vehicle and parts. Anticipated slower vehicle production is likely to pressure manufacturing output lower in the coming months.
• Consumer durable goods output continues to show significant weakness, down 9.5 percent year-over year.

Cool April Lifts Utility Output

• According to the National Climatic Data Center, this past April was cooler than normal and thus was a primary factor in higher utility output, up 0.3 percent.
• Capacity utilization rates have trended lower since late 2007. Weak domestic demand growth should help keep core inflation pressures under control in the near term.

Wachovia Corporation
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