Washington, DC, June 16--Industrial output surged in May, posting its biggest one-month rise in nearly six years, the Federal Reserve said today.
Industrial production rose 1.1% last month, the biggest monthly rise since August 1998. This followed a 0.8% rise in April, unrevised from the Fed's an initial estimate. Also in May, capacity use rose to 77.8%, the highest level since May 2001. This was up from April's revised level of 77.1%, initially reported at 76.9%
Economists had called for production to rise 0.8% and for capacity use to come in at 77.5%. Economists had expected the manufacturing sector to show growing momentum.
In addition to the May and April gains, the new industrial-production report showed no change for production in March.
In May, manufacturing production rose 0.9% after a 0.7% April increase, unrevised from the Fed's initial estimate. Manufacturing capacity use came in at 76.4%, up from April's revised level of 75.9%, initially reported as 75.7%.
Manufacturers generally have been upbeat about their prospects this year. The sector has shown strong recent growth as it has emerged from a long slump that was at the heart of the 2001 U.S. economic recession.
The New York Federal Reserve said Tuesday that its Empire State Manufacturing Survey came in at 30.17 in June, marking the 14th straight month of positive readings. Any number above zero means more manufacturers say business conditions are improving than say they are worsening.
Within the May industrial production report, utilities production rose 3.3% last month, on the heels of a 1.5% rise in April. Utilities capacity use also jumped, rising to 88.0% in May from 85.3% in April. The May rise reflected "unseasonably warm weather," the Fed said.
Auto production dropped in May after edging up in April. Production of motor vehicle assemblies fell to an annual rate of 11.58 million in May for autos and light trucks, down from the April rate of 12.00 million.
Motor vehicles and parts production fell 2.3% in May after a 0.3% fall in April. Production of consumer automotive products slid 2.0% last month after a flat showing in April.
Excluding autos, U.S. industrial production was up 1.3% last month. In April, this category showed a 0.9% increase.
