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U.S. Industrial Output Rebounds in June

Production at U.S. factories, mines and utilities rose in June after two straight monthly declines, according to the Federal Reserve’s latest data.



Industrial production in the United States rose more than forecast in June, the Federal Reserve reported yesterday. Nationwide production at factories, mines and utilities increased 0.5 percent in June after dropping 0.2 percent in May.

Production of consumer goods increased 0.7 percent last month, and the output of automotive products surged 6.2 percent.

Manufacturing output increased 0.2 percent during the same period, boosted by a 5.4 percent jump in the output of automobiles and auto parts.

This gain may not be a sign of renewed strength in the sector so much as it represents a technical bounce following the end of a labor strike at one of General Motors Corp.’s key suppliers.

The resolution of a three-month strike by GM’s largest axle supplier, American Axle & Manufacturing Holdings Inc., likely contributed to the rise in motor vehicles and parts output. The walkout, which stopped production of about 330,000 units and cost GM more than $2.5 billion, ended in late May.

Manufacturing, which accounts for about four-fifths of the industrial production report, decreased 0.1 percent in May. Excluding autos and parts, factory output edged down 0.1 percent in June.

The output at mines and utilities also were up in June: mining production increased 1.1 percent, following a 0.3 percent increase in May; and utilities (electric and gas) output was up 2.1 percent last month.

Meanwhile, capacity utilization, which measures the proportion of factories in use, broke a string of four straight monthly declines by rising unexpectedly. In June, the capacity utilization rate for total industry rose to 79.9 percent from 79.6 percent. It was originally reported in May as 79.4 percent, the lowest reading in more than two years.

For the second quarter as a whole, industrial production dropped 3.7 percent (annual rate) from the first quarter.

Another government report yesterday showed prices paid by U.S. consumers jumped in June by the most since 2005. The Labor Department yesterday announced that the consumer price index increased a more-than-forecast 1.1 percent in June, following 0.6 percent gain the prior month. Excluding food and energy, core prices climbed a more-than-anticipated 0.3 percent.

The consumer price index is the government’s key measure of inflation, and June’s numbers represent the biggest monthly rise since September 2005, when devastation from Hurricane Katrina drove up energy prices sharply.

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