Updated from 11:58 a.m. EDT
U.S. factories, mines and utilities stepped up their output in April at the fastest pace in almost two years, as they struggled to keep up with booming demand for energy and U.S.-made goods.
, a broad measure of the nation's so-called old-economy factory and utility output, jumped a staggering 0.9% in April, the largest gain since August 1998, the
said Monday. That comes on the heels of an also-stunning 0.7% March output figure.
Meanwhile, the proportion of factory
being actively used notched up to 82.1% in April vs. 81.7% in March.
The data were only slightly stronger than analysts' average expectations for a 0.8% rise in production, and slightly below expectations for a 81.8% capacity utilization rate, and likely had little influence on the movement of financial markets Monday.
But the numbers were yet another indicator that the U.S. economy continues to run at a hectic pace, fueled by heavy demand from both consumers and businesses. With manufacturing and utilities being stretched to their limits, economists and Fed officials worry that the imbalance of supply and demand will lead to price inflation.
In an attempt to bring supply and demand back into balance, the Fed has raised a benchmark short-term interest rate five times in quarter-percentage-point increments since June. The key
rate, which acts as a foundation for all other rates from credit cards to mortgages, now stands at 6%. In theory, higher interest rates slow demand by making it more costly for consumers and businesses to borrow and spend, but the Fed's efforts so far have done little to impede the broad-based economic growth.
Many economists expect the Fed to increase the magnitude of its efforts by raising rates by half a percentage point when its policymaking arm, the
Federal Open Market Committee
, meets on Tuesday. Markets will also have to grapple with a report Tuesday on consumer price inflation, which has shown acceleration in recent months, and could lead to concerns that the Fed will keep raising rates steadily at its next few meetings.
The overall growth of industrial production was broad-based. Manufacturing output rose 0.8% in April following a 0.9% increase in March. Utilities stepped up their production of gas and electricity by 2.8% after March's 1.8% drop, while mining companies increased production by 0.4% in April following a 1% gain in March.
Assembly of automobiles rose to a 13.3 million annualized pace in April vs. 13.0 million in March, while output of consumer goods rose 0.6% after staying steady the prior month.