16.05.201821:06:00UTC+00U.S. Industrial Production Increased in April; Homebuilding Slumps

U.S. industries pumped out more goods in April to meet growing demand from consumers and businesses, another sign the economy is gaining momentum early in the second quarter.

The strong report from the Federal Reserve came on the heels of recent data which showed a pickup in consumer spending in April. However, a sharp decline in homebuilding and permits last month put a dent on the brightening economic picture.

Industrial output, which reflects everything produced by factories, mines and utilities, grew a seasonally adjusted 0.7 percent in April from the previous month, according to the Federal Reserve. That recorded the third consecutive month of higher production.

The industrial sector is being supported by strengthening domestic and global economy, a still-weak U.S. dollar and tax cuts. However, there are concerns that trade tensions between the United States and China could slow momentum.

Strong industrial output and a pickup in consumer spending support expectations of second-quarter growth around a 3 percent annualized rate. That should allow the Fed to hike interest rates next month.

In a separate report, the Commerce Department said housing starts dropped 3.7 percent to a seasonally adjusted annual rate of 1.287 million units in April. The decline reversed March's rise, indicating that housing continued to face difficulties.