Industrial production in the U.S. spiked by even more than anticipated in the month of June, according to a report released by the Federal Reserve on Wednesday.
The report said industrial production soared by 5.4 percent in June after jumping by 1.4 percent in May. Economists had expected production to surge up by 4.3 percent.
Despite the substantial increase, the Fed noted industrial production remained 10.9 percent below its pre-pandemic February level.
The central bank also said industrial production for the second quarter as a whole plunged by an annual 42.6 percent, reflecting the largest quarterly decrease since the industrial sector retrenched after World War II.
“Looking ahead, the road to a full recovery will be much slower compared to the initial strong bounce of the past two months that was prompted by the relaxation of social distancing measures,” said a noted from economists at Oxford Economics.
They added, “The virus’ resurgence in many states in recent weeks has already led to the re-imposition of social distancing measures that will drag on the recovery and bolster already significant headwinds facing the industrial sector in H2 2020.”
The bigger than expected jump in production in June was led by manufacturing output, which skyrocketed by 7.2 percent after surging up by 3.8 percent in May.
The Fed said all major industries posted increases, with the production of motor vehicles and parts soaring by 105.0 percent.
The report also showed a significant rebound in utilities output, which spiked by 4.2 percent in June after plunging by 3.5 percent in May.
On the other hand, mining output tumbled by 2.9 percent in June following the 6.1 percent nosedive in the previous month.
The Fed also said capacity utilization in the industrial sector climb to 68.6 percent in June from an upwardly revised 65.1 percent in May.
Economists had expected capacity utilization to rise to 67.7 percent from the 64.8 percent originally reported for the previous month.
Capacity utilization in the manufacturing and utilities sectors increased to 66.9 percent and 72.3 percent, respectively, while capacity utilization in the mining sector fell to 75.0.
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