U.S. industrial production increases more than forecast in June

The Federal Reserve reported on Wednesday the U.S. industrial production rose 5.4 m-o-m in June, following an unrevised 1.4 percent m-o-m advance in May.

Economists had forecast industrial production would increase 4.3 percent m-o-m in June.

According to the report, manufacturing output climbed 7.2 percent m-o-m in June, as all major industries posted advances, with the largest gain registered by motor vehicles and parts (+105.0 percent m-o-m). Meanwhile, the output of utilities rose 4.2 percent m-o-m in June and mining production fell 2.9 percent m-o-m.

Capacity utilization for the industrial sector increased 3.5 percentage points m-o-m to 68.6 percent in June. That was 0.9 percentage points above economists’ forecast but 11.2 percentage points below its long-run (1972-2019) average.

In y-o-y terms, the industrial output fell 10.8 percent in June, following a revised 15.4 percent decrease in the prior month (originally a 15.3 percent drop).

For the second quarter as a whole, the industrial production plunged 42.6 percent y-o-y, its largest quarterly decline since the industrial sector retrenched after World War II.