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Industrial production remains subdued

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Industrial production remains subdued

More murky signs about US recovery.

According to a report from the Federal Reserve, US industrial output grew 0.3% in June.  This follows a 0.2% drop in May and a 0.5% revised decrease in April.

Analysts had expected an increase of 0.2%.

Manufacturing output remained flat during June, as it has for the past several months.

The auto sector was the main cause for the torpid manufacturing reading, falling 3.7% during the month.

The results provide yet another seemingly contradictory signal as to the strength of the US economy heading into Q3.  Labor markets appear relatively strong, and producer prices are rising moderately, suggesting an increasing growth rate for the remainder of the year.  However, the disappointing output numbers, the moribund state of manufacturing as reflected in today’s report on New York manufacturing from the New York Fed, and an increasing litany of downward revised growth rates for the remainder of the year from economists, make determining the outlook for growth difficult at best.

 

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