#Industrial #Output #C19Coronavirus #Reopening #Manufacturing #Fed
US industrial production in June posted the largest monthly gainer since Y 1959, indicating manufacturing is alive and well after C-19 coronavirus chaos related shutdowns.
Total output at factories, mines and utilities increased 5.4% from the prior month after climbing 1.4% in May, Fed data showed Wednesday.
The median projection in a survey of economists called for a 4.3% advance. Factory output jumped 7.2%, the biggest gainer since 1946.
The expanded rebound in production still leaves the Fed’s index of industrial output 10.9% below pre-medical emergency chaos marks and the capacity utilization rate shows slack as demand builds only gradually.
Sales may be tempered in coming months as reopenings have entered a more uncertain frame, with states like California imposing renewed lockdown measures.
In Q-1, industrial production fell an annualized 42.6%, the biggest setback in the post WWII era.
Capacity utilization, which measures the amount of a plant in use, increased to 68.6% from a revised 65.1% in May; it was 76.8% in February.
Extra capacity can weigh on corporate profits because business capital is underutilized, and it also signals a slowed capital spending outlook.
The increase in factory output was led largely by vehicle and parts output, which surged 105%.
Ex-auto production, factory output rose 3.9% as all major industries registered gains for the month.
The Fed’s report showed utility output increased 4.2%, while mining dropped 2.9%, the 5th straight monthly decrease.
Oil & Gas well drilling declined 18% after a 36.9% slide a month earlier. Drilling is down 70% from a year earlier after a slump in Crude Oil prices several months ago prompted cutbacks in exploration.
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