US Industrial Production Unexpectedly Fell in May

The Federal Reserve reported that production at the nation's factories, mines and utilities dipped 0.1% in May, following an increase of 0.8% in April 2006. This is first drop in production after a similar 0.1% dip in Jan'06. Overall industrial output was 4.3% above its May 2005 level.

  • Production of autos and auto parts fell by 1.3% last month following a smaller 0.2% drop in April.
  • The rate of capacity utilization for total industry fell 0.2 percentage points, to 81.7%, compared to long-run (1972-2005) average of 81%.
  • The capacity utilization rate for utilities edged up, to 86.5%, in May but remained slightly below its 1972-2005 average.

Although the US economy expanded at a sizzling pace of 5.3% in the first quarter, analysts believe that will slow to around 3% in the April-June quarter, as consumers struggle with rising interest rates, soaring gasoline prices and cooling home sales (AP).

 

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