By Greg Robb, MarketWatch WASHINGTON (MarketWatch) — U.S. industrial production was flat in April as a shortage of parts due to the Japan earthquake led to a slowdown in auto production, the Federal Reserve reported Tuesday. The weakness in industrial output was a surprise to economists who were expecting a 0.3% gain in April. Adding to a sense of weakness in the report, output in both February and March was revised lower. Production in February was revised to a 0.3% drop from the previous estimate of a 0.1% gain. Output in March was trimmed to a 0.7% gain from the prior estimate of a 0.8% rise. Losses in U.S. stock futures SPM11 -0.23% accelerated after the report. Earlier in the day, a separate gauge showed housing starts down 10.6% in April. See story on housing starts. Industrial output is still up 5% compared with a year ago. Capacity utilization, a key gauge of inflationary pressures, edged lower to 76.9% in April from 77.0% in March. Factory output alone fell 0.4% in April after a 0.6% rise in March. This is the first drop after nine straight monthly gains. Excluding autos, factory output rose 0.2% in April. Reuters A Chrysler Group assembly worker. Total motor vehicle assemblies dropped to a 7.9 million unit annual rate in April from a 9.0 million rate in March. The Fed said the decline was “mainly because of parts shortages that resulted from the earthquake in Japan.” Details Many of the subcomponents of the report were weaker in April. Consumer goods production fell 0.7% in April rising 0.9% in March. The index for business equipment fell 0.4% in April after a 0.5% decline. The output of construction supplies fell 0.1% after a 1.2% gain in March. Utility output jumped 1.7% in April after a 0.7% gain in March. Materials output rose 0.3% in the month. Output at mines rose 0.8% after a 1.4% gain in March.

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