U.S. industrial production increase is sign of resilience
INDUSTRIAL PRODUCTION in the U.S. increased in June, led by gains among automobile and machinery makers that signal manufacturing is boosting economic growth.
BLOOMBERG FILE PHOTO/BRENDAN SMIALOWSKI
By Alex Kowalski Bloomberg News
WASHINGTON - Industrial production in the U.S. increased in June, led by gains among automobile and machinery makers that signal manufacturing is boosting economic growth.
Output at factories, mines and utilities rose 0.4 percent last month after a revised 0.2 percent drop in May that was larger than previously reported, Federal Reserve data showed today in Washington. Economists forecast a 0.3 percent gain, according to the Bloomberg News survey median.
Manufacturing, which makes up about 75 percent of total production, rose 0.7 percent last month, reversing the prior month’s decline.
The pickup in manufacturing may temper concerns of a bigger slowdown in the industry that has spearheaded the three-year-old expansion. At the same time, factories face the challenges of a weakening global economy and an American consumer hobbled by 8.2 percent unemployment and stagnant income growth.
“Manufacturing looked decent in June,” said Harm Bandholz, chief U.S. economist at UniCredit Group in New York, said before the report. “The risk is from the uncertainty over the global economic outlook and, more recently, the fiscal situation in the U.S., which means companies will meet demand more and more by drawing down inventories.”
Projections from the 81 economists ranged from a decline of 0.8 percent to an increase of 0.9 percent. May’s industrial production figure was previously reported as a 0.1 percent drop.
The cost of living was little changed in June, underscoring Federal Reserve expectations that inflation will remain under control, another report today showed.
No change in the consumer-price index followed a 0.3 percent drop in May, according to Labor Department data. The measure matched the median forecast of economists in a Bloomberg survey. The so-called core measure that excludes volatile food and fuel costs rose 0.2 percent for a fourth month.
Stock futures rose, signaling the Standard & Poor’s 500 Index will rebound from its seventh drop in eight days, amid bets Fed Chairman Ben S. Bernanke will hint at more stimulus during testimony to Congress today. The contract on the S&P 500 Index expiring in September climbed 0.4 percent to 1,353.1 at 9:15 a.m. in New York.
The Fed’s production report showed motor vehicle output climbed 1.9 percent in June after a 2.2 percent decrease the month before. Machinery output increased 2.3 percent following a 0.5 percent decrease.