Steep rise in industrial production
The nation’s industrial sector boosted production in dramatic fashion in May, as a steep rise in activity in the nation’s factories continued to lift the broader economy.
The 1.2 percent increase in industrial production, which the Federal Reserve reported Wednesday, was stronger than expected and the best reading on that indicator since August 2009. The gain drove capacity utilization in the nation’s industrial sector to 74.7 percent, the highest level since October 2008, when the recession was worsening.
The industrial sector has been a driver of the economic recovery that began last summer, reflecting both steadily rising consumer demand for goods and inventory levels that had grown so lean during the recession that they needed to be rebuilt.
The strong new data offers some reason for confidence that the economic recovery remains underway after disappointing May data on private sector job creation and retail sales.
The rise in overall industrial production was driven by an 0.9 percent increase in manufacturing activity and a very sharp, 4.8 percent rise in output by the nation’s utilities. The latter tends to fluctuate based on the weather (in an unusually hot summer, for example, more people run their air conditioners, and electrical generation plants operate at a higher rate). The mining sector contracted slightly.
Posted by: NattyBump | June 16, 2010 11:01 AM | Report abuse
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