Market CommentariesIndustrial Production Rises Slowly In June

The nation's industrial base improved somewhat in June, albeit just not as much as had been generally expected. To wit, overall output climbed 0.2% last month. In May, the increase had been 0.5%. Expectations for the latest month had been for an increase of 0.4%.

Breaking the report down, we find that manufacturing output (the largest category) rose by 0.1% in June. That, too, was less than forecast. Moreover, the token advance was also less than the gains of 0.4% in May and 0.3% in April.

As to the other two, and much smaller, components, mining production gained a formidable 0.8% in June, following three straight months in which the respective increases had been 2.0%, 2.0%, and 1.1%. Also, the third group, the utility sector, saw its output ease in June to a decline of 0.3%.

At the same time, utilization rates at the nation's factories held steady at 79.1% in June, which, albeit flat, still matched the best level reached thus far this year. Breaking that report down, we find that usage eased from 77.2% in May to 77.1% in June in the manufacturing sector, while use levels rose slightly in mining, but eased a tad in the utility component.

Finally, in the past year, overall industrial production rose by a solid 4.1%, while utilization rates rose by more than two-and-a-half percentage points at the nation's factories.

Taken as a whole, this was a slightly disappointing report, with its flat to just nominal aggregate improvement, but the ongoing strength is still reassuring and argues for a strong second half for the economy