US industrial production well above forecasts

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.

Utilities output jumped 2.4% in June due to hot weather in the month and capacity utilization rose to 75.4% in June from 74.9% in May. - Marketwatch