US manufacturing output reaches over 6-month high in June, stays above forecast

Manufacturing output in the United States climbed to over six-month high in June, remaining slightly above forecast, buoyed by automobile production, a sign that the economy is recovering from the shackles of weak domestic demand.

Total manufacturing production rose 0.4 percent in June, after a 0.3 percent decline in May, data released by the Federal Reserve showed Friday. According to a Bloomberg forecast of 25 economists, manufacturing was poised to remain flat at 0.3 percent.

Decent stabilization in global energy prices and the fading effects of a strong dollar have helped manufacturers establish a strong footing on output this month. While improving demand is expected to lend support to the gloomy economy, the fallout from Brexit will possibly pose some hurdles to the economic growth of the country.

In addition, capacity utilization, which measures the amount of a plant that is in use, rose to 75.4 percent from 74.9 percent in the prior month. Utility output surged 2.4 percent, after a 0.9 percent drop the previous month, the Fed report showed.

Moreover, output of two-wheeler vehicles rose 5.9 percent after a 4.3 percent drop a month earlier. Excluding autos and parts, manufacturing was unchanged after a 0.1 percent rise. Machinery production increased 1.1 percent while output of computers and electronics fell 0.5 percent.

Construction materials dropped 0.8 percent. Consumer goods production jumped 1.1 percent, while output of business equipment climbed 0.7 percent. Meanwhile, industrial output increased 0.6 percent last month, the strongest gain since July 2015, after an upwardly revised 0.3 percent decline in May. Economists polled by Reuters had forecast industrial production to rise 0.2 percent last month.