**MNI 5 THINGS: US IP Modestly Stronger Than Expected, +0.5%>

--5 Things We Learned From Industrial Production Data

By Sara Haire and Holly Stokes

     WASHINGTON (MNI) - The following are the key points from the 

Industrial Production and Capacity Utilization data for March 

released by the Federal Reserve Tuesday: 

     - Industrial production came in slightly stronger than the 0.4% 

increase expected, rising 0.5%. Considering the large range of forecasts 

by analysts from +0.1% to +0.9%, this should come as a surprise to some. 

This gain follows an upwardly revised February IP 1.0% gain and 

the unrevised 0.2% decline in January. 

     - What normally is supposed to be the start of spring, March 

instead brought more winter weather to the Northeast. Following 

February's abnormally warm weather bringing in a 5.0% decline in 

utilities, March saw a large rebound, rising by 3.0%, making this the 

main driver of the gain in IP. This gain was widely anticipated among 

analysts, as previewed by MNI's 5 Things. 

     - The employment report had showed a 0.2% slowdown in manufacturing 

hours worked and IP manufacturing was expected to follow suit. However, 

manufacturing rose, albeit softly, by 0.1% in the month. This follows an 

even further upwardly revised February gain of 1.5% from 1.3% previously 

reported.   

     - Capacity utilization came in at 78.0%, only mildly above the 

77.9% expected, and breaking the slight trend of analysts' overestimating

March capacity utilization. This reading is the highest since March 2015.

Manufacturing capacity utilization fell by 0.1pp to 75.9%, following an 

upward revision to February.  

     - Mining rose by 1.0%, following February's upwardly revised 2.9% 

increase, pushing the year/year to 10.8%. The gain was mostly due to the 

gains in oil and gas extraction, with natural gas rising by 15.6%. This 

rise in the natural gas cateogry follows a 12.9% decline in February and 

a 6.1% decrease in January, and is up 14.8% year/year. 

[TOPICS: MAUDS$,M$U$$$,MAUDR$]