Byline: Christian Robles
According to a report released by the Federal Reserve on Tuesday, U.S. industrial production experienced its second consecutive monthly decline in June, largely driven by a slump in manufacturing of automobiles and energy products.
In June, industrial production, which includes manufacturing, mining, and utility output, fell by 0.5% compared to the previous month.
The manufacturing sector, making up the bulk of industrial production, saw a decrease of 0.3% for the second consecutive month. The Federal Reserve noted that the production of motor vehicles and energy products experienced a decline in June.
Similarly, the mining and utilities sectors saw respective drops of 0.2% and 2.6% in June.
When considering a twelve-month basis, overall industrial production experienced a 0.4% decline in June, with manufacturing output down by 0.3%. The decline in manufacturing output can be attributed to the Federal Reserve’s decision to increase interest rates in an effort to cool the economy and combat high inflation.
Capacity utilization, which indicates how much industries are producing relative to their potential capacity, fell to 78.9% in June from a revised 79.4% in May, according to the Fed.
