Factory Production Heats Up In Sign Of 2nd-Quarter Economic Rebound

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WASHINGTON (MCT) — Growth returned to U.S. factories in May after a one-month slump, a sign the economy is rebounding following a winter slowdown.

Industrial production rose 0.6 percent after a revised drop of 0.3 percent in April, the Federal Reserve said Monday. The increase was in line with economists’ forecasts for a 0.5 percent rise in May.

Factories are a major source of that production, which also includes output from mines and utilities.

Manufacturing and other industrial sectors are a crucial part of the economy, producing high-paying jobs that are key to robust growth.

After a decline of 0.2 percent in January caused by severe weather, production surged 1.1 percent in February. Growth was a strong 0.8 percent in March as well, but then turned negative.

The Fed initially had estimated output was down 0.6 percent in April, but the figure was revised Monday.

Manufacturing output was up 0.6 percent in May after dropping 0.1 percent the previous month.

Production from mines rose 1.3 percent last month, down from 1.6 percent in April. Output from utilities dropped in May for the fourth straight month, though the 0.8 percent decline was a significant improvement over April’s 4.5 percent fall-off.

In another sign of factory strength, a separate Fed report Monday showed manufacturing conditions improved in New York to a four-year high.

The Empire State Manufacturing Survey indicated that business conditions in the important region improved significantly for the second straight month. May’s increase was driven by a jump in the index for new orders, which also hit its highest level since 2010.

–Jim Puzzanghera
Los Angeles Times

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