Capital Markets Analysis

JULY 23, 2010

Industrial Production Edges Up Slightly

Industrial production edged up 0.1 percent in June, marking the fourth straight monthly increase in overall production. Although the increase was relatively soft, it did beat analyst expectations of a 0.2-percent drop for the month. Production during Q2 increased at a 6.6-percent annualized rate, down slightly from Q1’s 7-percent rate.

The small gain for June was concentrated entirely in mining and utilities, where output rose 0.4 percent and 2.7 percent, respectively. The utility output gain, spurred mostly by one of the warmest Junes on record, followed a 5.6-percent jump in May. Manufacturing dropped 0.4 percent for the month, the largest drop this year. Capacity utilization was unchanged at 74.1 percent. Manufacturers have helped lead the economy out of the recession, but continued growth will depend on recovery of the labor market over the next several quarters.

Source: Federal Reserve

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