After having edged down 0.1% in May, industrial production increased 0.2% in June, the Federal Reserve reported on July 15.
Manufacturing output was unchanged in June.
For the second quarter as a whole, total industrial production increased at an annual rate of 0.8%. In the second quarter, supply chain disruptions following the earthquake in Japan curtailed the production of motor vehicles and parts and restrained output in related industries. At 93.1% of its 2007 average, total industrial production in June was 3.4% above its year-earlier level.
"Twelve of the 20 manufacturing industries declined in June, indicating a widespread weakness in manufacturing production. The aftershocks of the Japanese tsunami are still reverberating through the U.S. motor vehicle and electronics industries in the form of parts shortages," said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance/MAPI. A relapse in the housing recovery also set back several housing-related manufacturing industries.
"Another reason for the weakness is that manufacturing production got too far ahead of overall demand growth in the economy," he added. "Manufacturing production outpaced the economy early in the year, increasing at a 7.2% annual rate in the first quarter of 2011, while GDP only increased at a 1.9% rate. In the second quarter, manufacturing production has nearly ground to a halt (0.2% annual rate) while overall economic growth is again expected to be 1.9%."
Copyright Agence France-Presse, 2011
