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The numbers: Industrial production collapsed in April, the Federal Reserve said Friday. Industrial output fell a record 11.2%, pulled down by a record drop in manufacturing.
Capacity utilization slumped to a record low 64.9% from 72.7% in March.
Economists polled by MarketWatch expected a 12% decline in production and capacity utilization of 63.2%.
What happened: There were declines across the board in April.
Manufacturing production a record 13.7 in April, led by a 70% reduction in production of motor vehicles and parts. Excluding autos, manufacturing output was down 10.3%.
Mining output dropped 6.1% and utility production slipped 0.9%.
Big picture: The decline reflects factory closures, declining oil output and less power consumption, said Sal Guatieri, senior economist at BMO Capital Markets. The COVID-19 pandemic led many factories to slow or suspend operations.
What are they saying? “Prospects for output remain weak, restrained by ongoing issues related to supply chain disruptions and weak demand, though a reopening of states and factories should boost output from low levels,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
Market reaction: U.S. equity benchmarks open lower Friday on weak economic data and signs U.S.-China trade tensions were ratcheting up. The S&P 500 index SPX, -0.45% was down 10.15 points to 2,842 in morning trading.
