A report released by the Federal Reserve on Thursday showed U.S. industrial production increased by more than expected in the month of May after a downwardly revised uptick in the previous month.
The Fed said industrial production climbed by 0.8 percent in May after inching up by a revised 0.1 percent in April.
Economists had expected industrial production to rise by 0.6 percent compared to the 0.5 percent increase that had been reported for the previous month.
The bigger than expected increase in industrial production came as manufacturing production advanced by 0.9 percent in May after edging down by 0.1 percent in April, partly reflecting a large gain in motor vehicle assemblies.
Mining output also jumped by 1.2 percent in May after falling by 0.4 percent in April, while utilities output crept up by 0.2 percent after spiking by 1.9 percent in the previous month.
Andrew Hunter, Senior U.S. Economist at Capital Economics, said the increase in industrial production “suggests that some of the shortages holding back production in recent months could be starting to ease.”
“But the big picture is that manufacturing output is still below its pre-pandemic peak and continues to lag well behind the earlier resurgence in goods demand,” Hunter added.
The Fed also said capacity utilization for the industrial sector climbed to 75.2 percent in May from 74.6 percent in April. Economists had expected capacity utilization to rise to 75.1 percent.
Capacity utilization in the manufacturing and mining sectors rose to 75.6 percent and 75.2 percent, respectively, while capacity utilization in the utilities sector was unchanged at 72.8 percent.
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