Factory Output Rises For 5th Straight Month
WASHINGTON (AP) — 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 percent last month, the Federal Reserve said Wednesday, down from a gain of 0.4 percent 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 percent in the second quarter, the most in more than two years.
Overall industrial production, which includes manufacturing, mining and utilities, edged up 0.2 percent in June, down from 0.5 percent in May.
Mining output, which includes oil and gas drilling, surged 0.8 percent. Utility production fell 0.3 percent, mostly reflecting weather patterns. Industrial production rose at an annual rate of 5.5 percent 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 percent 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 percent in the second quarter, according to a survey by the National Association for Business Economics. While healthy, that's down from a 3.5 percent forecast a month earlier.