Industrial production in the U.S. increased by slightly more than anticipated in the month of June, according to a report released by the Federal Reserve on Tuesday, with the increase partly due to a rebound by output in the manufacturing sector.
The Fed said industrial production rose by 0.4 percent in June following a revised 0.2 percent decrease in May. Economists had expected production to increase by 0.3 percent compared to the 0.1 percent drop originally reported for the previous month.
A rebound in manufacturing output contributed to the bigger than expected increase in industrial production, with manufacturing output rising by 0.7 percent in June after falling by 0.7 percent in May.
The increase in manufacturing output was due in large part to a 1.9 percent jump in the production of motor vehicles and parts, which came after a 2.2 percent decrease in the previous month. Machinery production also showed a notable 2.3 percent increase.
The report also showed a 0.7 percent increase in mining output in June, which came after output from mines came in unchanged in May.
On the other hand, utilities output tumbled by 1.9 percent in June after surging up by 2.8 percent in May and 2.3 percent in April.
Jennifer Lee, senior economist at BMO Capital Markets, said, "Despite all of the worrying surveys of U.S. business confidence and surveys of regional and national manufacturing activity, the official data point to still-steady growth."
"This is certainly an interesting development and the production numbers help explain why there was only a small minority of those on the FOMC committee more willing to take another step toward more QE," she added.
The Fed also said the capacity utilization rate crept up to 78.9 percent in June from a downwardly revised 78.7 percent in May. Economists had expected the capacity utilization rate to edge up to 79.2 percent from the 79.0 percent originally reported for the previous month.
Capacity utilization in the manufacturing sector climbed to 77.7 percent in June from 77.3 in May. Capacity utilization in the mining sector also rose to 89.4 percent from 89.0 percent, while capacity utilization in the utilities sector slid to 74.2 percent from 75.8 percent.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.