U.S. Manufacturing Rebound Was Better Than Expected in May

Manufacturing staged a comeback in the United States in May, according to data released by the Federal Reserve Tuesday.

Factory output rose by 3.8 percent, slightly higher than economists were expecting. Most major industries posted increases, the Fed said, with the largest gain registered by motor vehicles and parts.

Manufacturing output fell 5.3 percent in March and 15.5 percent in April.  Compared with a year ago, it is down 16.5 percent.

Output for consumer goods manufacturing rose 3.9 percent. Auto production was up 81.9 percent in May. Production of furniture, carpeting, and appliances rose 9.4 percent. Clothing maufacturing jumped 21 percent. All categories of consumer goods remain well below the year-ago levels.

Business equipment manufacturing jumped 5.8 percent. Production of transit equipment surged 53.8 percent, the first monthly increase in at least five months. Production of information technology goods rose 0.9 percent into positive territory for the year, perhaps a reflection of increased demand for work-from-home technology. Production of defense, space, and industrial equipment also rose.

Industrial production overall–which also includes utilities and mining–rose by 1.4 percent in May, below forecasts. Mining production fell 6.8 percent, the fourth straight monthly decline, driven down by a 36.9 percent decline in oil and natural gas drilling. Production at utilities fell 2.3 percent on lower electricity and natural gas usage.