US industrial production growing at the fastest pace since January

The manufacturing sector in the US rose in June 2016 at the fastest pace since January, supported by the production of cars. The new report of US industrial production signs that domestic demand is improving. Industrial production, which draw 75% of the entire industry, grows by 0.4% in June 2016, as in May shrank by 0.3%. The median forecast of economists was for increase of 0.3%. The total production, which includes mining and utilities, recorded growth of 0.6%, which also exceeded expectations and was the largest increase in nearly a year.

The stabilization in commodity prices together with the waning effects of the strong dollar, allow companies in the manufacturing sector also to occupy a stable position. The smaller stocks and increased demand from households support the industry, but also the global implications of the Brexit referendum can be an obstacle for US companies to export. The industrial sector generates about 12% of the US economy.

The good results probably reflect the warm summer, this June the warmest in all states except Hawaii and Alaska. Mining, including drilling for oil, recorded a growth of 0.2%, reflecting stabilization in the price of oil and other raw materials.

more recommended stories