The numbers: U.S. industrial production fell 0.2% in May after two straight months of gains, the Federal Reserve reported Thursday.

The decline was below expectations of a flat reading, according to a survey of economists by The Wall Street Journal.

Capacity utilization slipped to 79.6 in May from 79.8 in the prior month.

The capacity utilization rate reflects the limits to operating the nation’s factories, mines and utilities. 

The drop in capacity utilization was in-line with forecasts.

Key details: Manufacturing rose 0.1% in May after a sharp 0.9% gain in the prior month. 

Motor vehicles and parts output, which has been a strong contributor to production, rose 0.2% after a 9.8% jump in the prior month. Excluding autos, total industrial output fell 0.2%.

Utilities output fell 1.8% in May. Mining output, which includes oil and natural gas, fell 0.4% after a 0.3% gain in the prior month.

Big picture: Manufacturing has been struggling with weak demand and higher interest rates. The sector is 0.3% below its year-earlier levels.

Outside of transportation there is little support for the manufacturing sector, said Richard Moody, chief economist at Regions Financial Corp.

See also  Special master appointed to review documents seized from Trump’s Florida home

Market reaction: Stocks
DJIA,
+0.56%

SPX,
+0.45%
were set to open lower on Thursday while the yield on the 10-year Treasury note
TMUBMUSD10Y,
3.732%
dropped to 3.75% after jobless claims remained at high levels in the latest week.


Source link

(This article is generated through the syndicated feed sources, Financetin doesn’t own any part of this article)

Leave a Reply

Your email address will not be published. Required fields are marked *