09:26 AM EDT, 04/16/2024 (MT Newswires) -- US industrial production rose by 0.4% in March, as expected in a survey compiled by Bloomberg as of 7:45 am ET and following an upwardly revised 0.4% gain in February.

Despite those gains, industrial production still declined at an annual rate of 1.8% in the first quarter, the Federal Reserve said.

Manufacturing production rose by 0.5% overall and was up 0.3% excluding a 3.1% surge in motor vehicle and parts production.

Utilities production rebounded by 2% after a 7.6% drop in February, but mining production decreased by 1.4% after a 3% gain.

Capacity utilization increased to 78.4% in March from a 78.2% rate in February, compared with expectations for a larger increase to a rate of 78.5%.

The monthly industrial production report from the Federal Reserve measures production growth by manufacturers, utility producers and mining operations. The manufacturing data is broken down between products for use in the longer-term (durable) and shorter-term (non-durable), with vehicle production a key component. Also included is capacity utilization, which shows how much spare capacity producers have available.

A stronger-than-expected reading on industrial production is usually bullish for the stock market but may be bearish for the manufacturing, mining or utilities sectors depending on how that portion of the data performed in each month.

Overall, bonds prefer slower industrial production growth as a signal of more modest inflation but in times of tight supply, such as during the pandemic, it is possible to have both sluggish output and rising inflation.