US Industrial Production Grows Most In 11 Month

Source: Daily FX

Despite record raw material prices and a generational low in domestic demand, factory activity actually rose at its fastest pace in 11 months through June. The Federal Reserve's Industrial Production survey reported a 0.5 percent pick up in activity last month and a pick up in capacity utilization to 79.9 percent. This is a promising sign for general growth as fears of a recession are still threatening the world's largest economy with consumer spending fading and the housing recession deepening. At the same time, the source of this strength was largely seen in temporary or external components. Export bookings accounted for a generous portion of the pick up in production. Looking deeper into the components, a 0.2 percent improvement in the manufacturing component was largely encouraged by a 5.4 percent jump in auto and parts orders as the supplier strike came to an end. From the sector breakdown, production of consumer goods rose 0.7 percent, business equipment increased 0.2 percent and energy output jumped 1.0 percent. With the housing slump still in full swing, construction dropped 0.9 percent.