Unexpected 0.2% Fall in U.S. Industrial Output for May

The latest report from the Federal Reserve shows that U.S. industrial production fell by 0.2% in May, contrary to economists’ expectations. This decrease follows a revised 0.1% gain in April.

Analysts had predicted a modest increase of 0.1%, rather than the previously unchanged figure reported for the prior month. Instead, industrial production dipped unexpectedly.

The decline was largely driven by a sharp drop in utilities output, which slid by 2.9% in May after a robust 4.9% jump in April.

On the other hand, manufacturing output inched up by 0.1% in May, helped by a 4.9% surge in the production of motor vehicles and parts, even though manufacturing output excluding these fell by 0.3%.

Additionally, mining output grew slightly by 0.1% in May following a 0.3% drop in the previous month.

The report also indicated that capacity utilization in the industrial sector decreased to 77.4% in May from 77.7% in April, despite economists expecting no change. In the utilities sector, capacity utilization fell to 68.5%, while manufacturing remained steady at 76.7% and mining slightly increased to 91.1%.