Rising factory output provides boost to U.S. growth
Washington - Industrial production climbed in June to cap the strongest quarter in almost four years as manufacturers provided a bigger spark for the U.S. economy.
A 0.2 percent increase in output at factories, mines and utilities last month followed a revised 0.5 percent advance in May, figures from the Federal Reserve showed Wednesday in Washington. While the June gain fell short of expectations, production rose at a 5.5 percent annualized rate from April through June, the most since the third quarter of 2010.
The fastest pace of car sales in eight years and a recent pickup in bookings for business equipment point to further output gains. Improving overseas markets, underscored by a report showing faster growth in China, would also keep assembly lines busy and propel the economy after a first-quarter slump.
"The industrial sector of the U.S. economy has been doing well," said Neil Dutta, head of U.S. economics at Renaissance Macro Research in New York. "It's indicative of an improving economy."
The median forecast in a Bloomberg survey of 82 economists called for a 0.3 percent advance in U.S. industrial production. Estimates ranged from a drop of 0.1 percent to an increase of 0.6 percent after a previously reported May gain of 0.6 percent.
Manufacturing, which makes up 75 percent of total production, grew 0.1 percent in June, less than forecast as automakers cut back and factories slowed output of nondurable goods such as energy and clothing. The median estimate in the Bloomberg survey called for a 0.3 percent June increase.
In the second quarter, factory production advanced at a 6.7 percent annualized rate, the fastest since the first three months of 2012.
Utility output fell for a fifth straight month in June, dropping 0.3 percent after a 0.4 percent decline the previous month. Mining production, which includes oil drilling, increased 0.8 percent.
The gain in manufacturing was held back by a drop in auto production. The output of motor vehicles and parts decreased 0.3 percent in June after a 1.9 percent surge a month earlier, Wednesday's report showed. Factory output excluding vehicle and parts production rose 0.2 percent last month.
"Things slowed down a little bit in June," said Ryan Sweet, senior economist at Moody's Analytics Inc. in West Chester, Pennsylvania. "The auto plant production schedules point to a pickup in auto manufacturing over the next couple of months."
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