US manufacturing production surges in May

Date:

Share post:


WASHINGTON (Reuters) – Production at U.S. factories increased more than expected in May, recouping all the declines in the prior two months, but the momentum is unlikely to be sustained amid higher interest rates and softening demand for goods.

Manufacturing output jumped 0.9% last month following a downwardly revised 0.4% drop in April, the Federal Reserve said on Tuesday. Economists polled by Reuters had forecast factory output rebounding 0.3% after a previously reported 0.3% fall in April. Production at factories had declined in March and April. It gained 0.1% year-on-year in May.

Manufacturing, which accounts for 10.4% of the economy, has been hamstrung by higher borrowing costs. An Institute for Supply Management survey published earlier this month found that “demand remains elusive as companies demonstrate an unwillingness to invest due to current monetary policy and other conditions. The ISM said “these investments include supplier order commitments, inventory building and capital expenditures.”

Spending on goods declined in first quarter for the first time in 1-1/2 years. The Fed last week kept its benchmark overnight interest rate in the 5.25%-5.50% range, where it has been since last July. U.S. central bank officials pushed out the start of rate cuts to perhaps as late as December, with policymakers projecting only a single quarter-percentage-point reduction for this year.

Motor vehicle and parts output rebounded 0.6% last month after tumbling 1.9% in April. Durable goods manufacturing production increased 0.6%. There were large increases in the output of wood products, machinery, computer and electronic products as well as furniture and related products.

Nondurable manufacturing production shot up 1.1%, with a 1.5% fall in printing and support offset by sturdy gains elsewhere.

Mining output climbed 0.3% after falling for two straight months. Utilities production advanced 1.6% after rebounding 4.1% in the prior month. Overall industrial production accelerated 0.9% in May. That followed an unchanged reading in April. Industrial production rose 0.4% year-on-year in May.

Capacity utilization for the industrial sector, a measure of how fully firms are using their resources, rose to 78.7% from 78.2% in April. It is 0.9 percentage points below its 1972–2023 average. The operating rate for the manufacturing sector increased to 77.1% from 76.6% in the prior month. It is 1.1 percentage points below its long-run average.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)



Source link

Alexandra Williams
Alexandra Williams
Alexandra Williams is a writer and editor. Angeles. She writes about politics, art, and culture for LinkDaddy News.

Recent posts

Related articles

Here's What the Latest Science Tells Us About Ivermectin

EARLY IN THE Covid pandemic, some medicines got reputations for potentially being able to treat the virus,...

Deadly bomb cyclone hits Pacific Northwest, bringing high winds and devastating damage

At least two people have died after a bomb cyclone slammed into the Pacific Northwest, snapping tree...

Weekend storm dishes another brutal blast of winter to the Prairies

There's no easing into winter across the Prairies this week, as back-to-back storm systems bring plunging temperatures,...

Winter Weather Advisory issued for parts of area; Latest track, timing, impacts for snow

Snow showers are likely on Thursday for the snowflakes of the season.The National Weather Service has issued...

Russia says new US base in Poland raises overall nuclear danger

MOSCOW/WARSAW (Reuters) -Russia said on Thursday that a new U.S. ballistic missile defence base in northern Poland...

North Carolina GOP lawmakers vote to strip incoming Democratic leaders' powers

North Carolina Republican lawmakers voted to strip the state’s incoming Democratic governor and attorney general of key...

Twin Cities roads 'glare ice,' local sheriff advises limited travel

Snow coupled with temps dipping below freezing has led to very slippery road conditions in Minnesota, namely...

Missing Hawaii woman’s family alarmed over new info: ‘She’s not alone’

HONOLULU (KHON2) — It has been nine days since Hannah Kobayashi’s cell phone was last located at...