Manufacturing, mining power U.S. industrial production
* Industrial production increases 0.6 percent in June
* Manufacturing production rises 0.8 percent
* Mining output up 1.2 percent; utilities fall 1.5 percent
By Lucia Mutikani
WASHINGTON, July 17 (Reuters) - U.S. industrial production
increased in June, boosted by a sharp rebound in manufacturing
and further gains in mining output, the latest sign of robust
economic growth in the second quarter.
The Federal Reserve said on Tuesday industrial production
rose 0.6 percent last month after a downwardly revised 0.5
percent decline in May. Economists polled by Reuters had
forecast industrial production rising 0.6 percent last month
after a previously reported 0.1 percent dip in May.
Industrial production increased at a 6.0 percent annualized
rate in the second quarter, faster than the 2.4 percent pace
logged in the January-March period.
Manufacturing output surged 0.8 percent in June after
decreasing 1.0 percent in May. A 7.8 percent jump in motor
vehicle production buoyed manufacturing output last month. Motor
vehicle production declined 8.6 percent in May after a fire at a
parts supplier caused a sharp drop in the assembly of trucks.
The data came on the heels of a report on Monday showing
retail sales not only rose solidly in June, but were much
stronger than previously reported in May.
Strong industrial production and retail sales, together with
smaller trade deficits in April and June suggest economic growth
accelerated sharply in the second quarter.
Gross domestic product estimates for the April-June quarter
are as high as a 5.2 percent rate, more than double the first
quarter's 2 percent pace.
Manufacturing, which accounts for about 12 percent of the
economy, is being supported by a strong domestic and global
economy. But escalating trade tensions between the United States
and its major trade partners, including China, Canada, Mexico
and the European Union, could undercut business spending.
The International Monetary Fund warned on Monday that
tit-for-tat import tariffs threatened to derail the global
economic recovery, adding that the U.S. was especially
vulnerable to a slowdown in its exports.
Manufacturing output increased at a 1.9 percent rate in the
second quarter after growing at a 1.7 percent pace in first
quarter. In June, there was an increase in the production of
wood, computer and electronic products as well as aerospace and
miscellaneous transportation equipment.
Mining production increased 1.2 percent, adding to the 2.2
percent rise in May. Mining output has surpassed its previous
historical peak, which was set in December 2014.
Oil and gas well drilling rose 2.9 percent in June, with
further gains likely following recent increases in oil prices.
Mining output accelerated at a 19.4 percent rate in the second
quarter after notching a 11.0 percent pace in the first quarter.
Utilities output fell 1.5 percent in June after declining
0.7 percent in May.
With production increasing solidly last month, capacity
utilization, a measure of how fully firms are using their
resources, increased to 78.0 percent from 77.7 percent in May.
It is 1.8 percentage points below its 1972-to-2017 average.
Officials at the Fed tend to look at capacity use measures
for signals of how much "slack" remains in the economy — how far
growth has room to run before it becomes inflationary.
(Reporting by Lucia Mutikani
Editing by Chizu Nomiyama)
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