Industrial production increased 0.2 percent in March, following an upwardly revised 1.0 percent gain the previous month on the back of increased manufacturing production, particularly transportation equipment. Compared to a year ago, production also rose 0.2 percent, the first increase in seven months.

Overall manufacturing rose 0.6 percent in March after a robust 1.3 percent increase in February. Output of transportation equipment increased for the third consecutive month, gaining 3.1 percent in March, extending the 3.7 percent February increase. Compared to a year-ago, production in the transport sector was up 3.9 percent in March and up 1.3 percent in February, which was the first increase after 12 months of decline. This suggests some base effects for the year-on-year comparison.

Among main industrial sectors, capital goods production increased 1.1 percent in March after a 2.1 percent gain the previous month, while consumer non-durables output rose 0.5 percent.

At the same time, the manufacture of consumer durable goods fell 2.5 percent, perhaps due to an actual or expected slowdown in consumer spending.

Industrial production measures the physical output of the nation's factories, mines and utilities. Manufacturing is seen as the best guide to underlying developments as some sectors can be very volatile and cause misleadingly large short-term swings in total industrial production.

Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios. Like the PPI and the orders data, construction is excluded from the data. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.