U.S. Industrial Production Unexpectedly Dips In May As Utilities Output Slumps
June 15, 2023The Federal Reserve released a report on Thursday unexpectedly showing a modest decrease in U.S. industrial production in the month of May.
The Fed said industrial production slipped by 0.2 percent in May after climbing by 0.5 percent in April, while economists had expected production to inch up by 0.1 percent.
The unexpected dip in production was led by a continued slump in utilities output, which tumbled by 1.8 percent for the second consecutive month.
Mining output also fell by 0.4 percent in May after rising by 0.3 percent in April, while manufacturing output crept up by 0.1 percent in May following a 0.9 percent advance in April.
“The increase in manufacturing output last month was more than offset by declines in mining output and utilities output – the return of more seasonable weather last month weighed on cooling demand,” said Michael Pearce, Lead U.S. Economist at Oxford Economics.
He added, “Mining output appears to have peaked, with the drilling rig count declining in recent months as global oil prices have stabilized at lower levels.”
The report also said capacity utilization in the industrial sector edged down to 79.6 percent in May from an upwardly revised 79.8 percent in May.
Economists had expected capacity utilization to come in unchanged compared to the 79.7 percent originally reported for the previous month.
Capacity utilization in the utilities sector fell to 70.7 percent in May from 72.2 percent in April, while capacity utilization in the manufacturing and mining sectors was roughly flat at 78.4 percent and 92.2 percent, respectively.
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