An employee installs a window onto a truck on the assembly line at the Mack Truck Inc. plant in Macungie, Pennsylvania
WASHINGTON (MarketWatch) — Industrial production in June grew at the fastest monthly rate in eleven months, on the back of strong auto and utility output.
The Federal Reserve said Friday that industrial production grew 0.6% in June, topping the MarketWatch-compiled economist consensus for 0.5% growth. This is the fastest growth since last July.
In addition, May’s decline was revised to a 0.3% fall from an initially reported 0.4% drop.
Despite the gains, the factory sector is still struggling.
For the second quarter as a whole, industrial production fell at an annual rate of 1%, its third consecutive quarterly decline and the fifth out of the past six.
Compared to a year ago, production was down 0.7%.
Manufacturing has been hurt by the strong dollar, the drop in oil prices, and the sluggish global economy.
Economists believe the sector has bottomed but signs of an upturn have proven elusive. There is concern that the Brexit vote could increase business uncertainty. The dollar has risen sharply against the British pound since the referendum in late June.
In June, manufacturing output grew 0.4% after a 0.3% decline in the prior month. The gain was due to a surge in automotive production, which leapt 5.9% after a 4.3% nosedive in May. Excluding autos, manufacturing was flat.
Utilities output jumped 2.4% in June due to hot weather in the month.
Mining output, which includes oil and gas extraction, rose 0.2%, the second straight increase after eight months of decline.
Capacity utilization rose to 75.4% in June from 74.9% in May.
Separately, the New York Fed reported that the Empire State’s general conditions index fell to 0.6 in July from 6 in June.
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