Federal Reserve
The March industrial-production activity report is out, and the numbers reflect a strengthening economy.

Production climbed 0.7% during the month, beating expectations for a 0.5% gain. February's growth figure was revised up to 1.2% from an earlier estimate of 0.6%.


Consumer goods, business equipment, construction, and materials all saw growth.

The capacity-utilization rate jumped to 79.2% from 78.4% a month ago. This is much tighter than the 78.7% expected.


Economists have argued that a rising capacity-utilization rate will eventually lead to more hiring and growth investments.

"[T]here is a slight lag but a decent 65% historical correlation," said Gluskin Sheff economist David Rosenberg of capacity utilization and capital expenditures. "History also shows that once 77% is breached in terms of CAPU rates in an up-cycle, capital spending in real terms in the ensuing years averages out to be 0% growth — enough to add an increment 60 basis points to headline GDP trends."

Rupkey believes all of this is consequential to the Federal Reserve, which is currently scaling back monetary stimulus.

"The economy is stronger than you think and getting stronger," said Rupkey. "The Fed's exit plans will need to hurry-up if the economy keeps putting numbers like these up on their dashboard."

Here's a table breaking down the market and industry groups in the Fed's industrial production report:

Federal Reserve