News Column

U.S. Industrial Output Back on Track After Poor Q1

July 16, 2014

Christopher S. Rugaber, The Associated Press

Industrial output rose strongly in the April-June quarter (AP)
Industrial output rose strongly in the April-June quarter (AP)

WASHINGTON - U.S. factory output increased for the fifth straight month in June as manufacturers cranked out more aircraft, chemicals and furniture.

Factory production rose 0.1 per cent last month, the Federal Reserve said Wednesday, down from a gain of 0.4 per cent in the previous month. May's data was revised slightly lower, but April's reading was revised much higher.

While last month's increase was modest, manufacturers strongly boosted output in the April-June quarter. That has helped the economy return to growth after a sharp contraction in the first three months of the year. Factory output rose at an annual rate of 6.7 per cent in the second quarter, the most in more than two years.

Overall industrial production, which includes manufacturing, mining and utilities, edged up 0.2 per cent in June, down from 0.5 per cent in May.

Mining output, which includes oil and gas drilling, surged 0.8 per cent. Utility production fell 0.3 per cent, mostly reflecting weather patterns. Industrial production rose at an annual rate of 5.5 per cent in the second quarter, the best showing in nearly four years.

Americans are buying more cars and businesses are spending more on steel and other metals and computers. Auto sales reached an eight-year high in June. Those gains are driving growth in factory output.

The government's jobs report earlier this month showed that factories added 16,000 positions in June, the most in four months, and the average work week for manufacturing employees remained at a post-recession high.

A survey earlier this month by the private Institute for Supply Management, meanwhile, found that manufacturing expanded in June for the 13th straight month, though at a slightly slower pace than the previous month. Growth was broad-based across nearly all the 18 sectors that the survey covers. The ISM is a trade group of purchasing managers.

The economy shrank 2.9 per cent at an annual rate in the first quarter, the worst showing in five years.

But most economists expect growth returned in the April-June quarter. On average, analysts forecast the economy grew at an annual pace of 3 per cent in the second quarter, according to a survey by the National Association for Business Economics. While healthy, that's down from a 3.5 per cent forecast a month earlier.

___

Follow Chris Rugaber on Twitter at http://Twitter.com/ChrisRugaber

-----

Original headline: US factory output rises for 5th straight month in June, boosting economy after dismal 1Q


For more stories covering business, please see HispanicBusiness' Business Channel



Source: © 2014 The Canadian Press. All rights reserved.


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters