May industrial production sees largest increase in 10 months

By Greg Robb

Output up 0.9%, above estimate of 0.4% gain

The numbers: U.S. Industrial production rose 0.9% in May, the Federal Reserve reported Tuesday. That is the biggest gain since last July.

The gain was above expectations of a 0.4% gain, according to a survey of economists by the Wall Street Journal.

Capacity utilization rose to 78.7% from 78.2% in the prior month. The capacity-utilization rate reflects the limits to operating the nation's factories, mines and utilities.

Economists had forecast a 78.6% rate.

Key details: Manufacturing rose 0.9% in May after a 0.4% fall in the prior month.

Motor vehicles and parts output jumped 0.6% after a 1.9% drop in the prior month. Excluding cars, total industrial output increased 0.7%.

Utilities output rose 1.6% in May on warm weather after a 4.1% rise in the prior month. Mining output, which includes oil and natural gas, rose 0.3% after a 0.7% fall in the prior month.

Big picture: The jump in production follows two months of weak readings. Economists had expected manufacturing to improve as the year went on, but not at such a strong pace.

So far in the second quarter, the level of industrial production is up 2.5% at an annual rate over the first-quarter average.

Market reaction: Stocks SPX opened slightly higher on Tuesday, while the 10-year Treasury yield BX:TMUBMUSD10Y fell to 4.249% in early morning trading following a soft retail-sales report.

-Greg Robb

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

06-18-24 0944ET

Copyright (c) 2024 Dow Jones & Company, Inc.