A shortage of semiconductors hampered U.S. auto production in June, contributing to worse-than-expected factory output, the Federal Reserve reported Thursday.
Industrial production rose 0.4% last month, weaker than economists projected and a slowdown from the 0.7% growth seen in May, according to the Fed data.
Manufacturing fell 0.1% due to the shortage of the computer chips that are used across industries, and which caused automakers to idle factories in recent months.
"Growth clearly has moderated from initial surge last spring, but autos aren't the only sector struggling with tight supplies of key inputs," Ian Shepherdson of Pantheon Macroeconomics said.
The data showed industries including nonmetallic mineral products as well as electrical equipment, appliances and components saw production fall more than 1% last month.
But the auto industry was among the hardest hit, and motor vehicle and parts output dropped 6.6%. Excluding that sector, manufacturing rose 0.4%.
Mining rose 1.4%, while utilities output gained 2.7%, which the Fed attributed to increased use of air conditioning as summer arrived.
U.S. factories are recovering from the Covid-19 pandemic, and June industrial production was 9.8% above the level in June 2020.
However, total output remains 1.2% below February 2020, before the virus caused business restrictions nationwide.
Shepherdson said outside the shortage-plagued auto sector, other manufacturers have seen output rise at a "modest pace."
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