U.S. industrial production grows less than anticipated in June

The Federal Reserve reported on Thursday the U.S. industrial production rose 0.4 percent m-o-m in June, following a revised 0.7 percent m-o-m advance in May (originally a 0.8 percent m-o-m increase).

Economists had forecast industrial production would increase 0.6 percent m-o-m in June.

According to the report, the manufacturing output edged down 0.1 percent m-o-m, mainly due to a 6.6 percent m-o-m plunge in the production of motor vehicles and parts amid an ongoing shortage of semiconductors. Excluding motor vehicles and parts, factory output was up 0.4 percent m-o-m in June. At the same time, the mining production increased 1.4 percent m-o-m, while the output of utilities surged 2.7 percent m-o-m, reflecting heightened demand for air conditioning, as much of the country experienced a heatwave in June.

Capacity utilization for the industrial sector increased 0.3 percentage point m-o-m to 75.4 percent in June. That was 0.2 percentage points below economists’ forecast and 4.2 percentage points below its long-run (1972-2020) average.

In y-o-y terms, the industrial output surged 9.8 percent in June, following a revised 16.1 percent surge in the prior month (originally a 16.3 percent climb) but it was 1.2 percent below its pre-pandemic level.