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US industrial production up 0.6 percent in June

U.S. industrial production rose in June by the largest amount in 10 months, led by a strong rebound in auto production.

The Federal Reserve says industrial production increased 0.6 percent last month, the best showing since a similar gain last August. In May industrial production had fallen 0.3 percent.

The key manufacturing sector posted a 0.4 percent rise, reflecting a jump in the output of motor vehicles and parts, which rose by 5.9 percent after having fallen by 4.3 percent in May.

Output at the nation’s utilities rose 2.4 percent as electricity production increased as warmer weather than normal boosted demand for air conditioning. Output in the mining sector edged up a tiny 0.2 percent, the second small increase after eight straight monthly declines.

The 0.2 percent June gain in industrial production was stronger than the 0.2 percent increase that many economists had been forecasting.

Jennifer Lee, senior economist at BMO Capital Markets, said the June report offered a glimmer of hope for better days ahead for industrial production.

“This latest broad-based gain hints that we’re starting to see some upward momentum,” she wrote in a research note.

Overall capacity utilization rose to 75.4 percent in June, compared to 74.9 percent in May. At the depths of the Great Recession in 2009, U.S. industry was operating at just 66.7 percent of capacity. Even after seven years of an economic expansion, the 75.4 percent operating rate in June was below the 80 percent average from 1972 through 2015.

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