Washington: New data on US economy points to a steady improvement for US industry, giving rise to hopes for a strong recovery from recession, economists say.

The Federal Reserve reported that US industrial output rose 0.4 per cent in April from the previous month, the fourth consecutive month of rising output after production fell in 14 of the 15 prior months.

In a separate report, the Fed said US industry operated at 75.5 per cent of capacity in April. This is the highest rate of capacity in use since September.

The Commerce Department said meanwhile that US business inventories fell 0.3 per cent in March, the 14th consecutive monthly decline putting inventories at their lowest level since October 1999.

A decline in inventories usually means that industry has to ramp up production, which usually leads to improvements in output, but some economists say growth may be slow, with business leaders cautious.

"Corporate America is in a slow growth mode," said Ethan Harris, co-chief economist at Lehman Brothers.

Despite a "pretty powerful" stimulus coming from monetary and fiscal policy, corporations remain hesitant to ramp up production, after profits contracted deeply during the recession and in the midst of continuing scandals and questioning of accounting standards.

"The process kind of gets stuck in the mud," as firms are slow in boosting orders and other manufacturers respond by only slowing raising production. Others said the data show a robust if not spectacular picture for the current quarter.