Factory production heats up in sign of second quarter economic rebound

Industrial production
Jerry Drury installs parts on a truck engine assembly line at Volvo Trucks’ powertrain manufacturing facility in Hagerstown, Md.
(Patrick Semansky / Associated Press)

WASHINGTON — Growth returned to U.S. factories in May after a one-month slump, a sign the economy is rebounding following a winter slowdown.

Industrial production rose 0.6% after a revised drop of 0.3% in April, the Federal Reserve said Monday. The increase was in line with economists’ forecasts for a 0.5% rise in May.

Factories are a major source of that production, which also includes output from mines and utilities.

The industrial sector, which includes manufacturing, is a crucial part of the economy, producing high-paying jobs that are key to robust growth.


After a decline of 0.2% in January caused by severe weather, production surged 1.1% in February. Growth was a strong 0.8% in March as well, but then turned negative the following month.

The Fed initially had estimated overall industrial output at a negative 0.6% in April, but the agency revised it to a positive figure Monday.

Manufacturing output was up 0.6% in May after dropping 0.1% the previous month.

Production from mines rose 1.3% last month, down from 1.6% in April. Output from utilities dropped in May for the fourth straight month, though the 0.8% decline was a significant improvement over April’s 4.5% fall-off.


In another sign of factory strength, a separate Fed report Monday showed manufacturing conditions improved in New York to a four-year high.

The Empire State Manufacturing Survey from the Federal Reserve Bank of New York indicated that business conditions in the region improved significantly for the second straight month.

May’s increase was driven by a jump in the index for new orders, which also hit its highest level since 2010.

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