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Factories Humming at Full Tilt in June
Industrial production rose 0.6% last month, wiping out a similarly sized decline in May, the Federal Reserve said earlier this week. Manufacturing output rose by an annualized 6% in the second quarter, and 3.8% year over year.
The numbers reflect a surge in activity, following a lackluster start to 2018. By another measure, known as capacity utilization, 78% of U.S. factories were running at full steam in June, compared to 77.7% in May.
Although that level of utilization is about 1.8 percentage points below the historic average, it still represents a multi-year high. Many companies complain they can’t find enough skilled workers to meet demand, MarketWatch reported.
A major factor in the June increases was the auto industry. Car manufacturers stepped up production by about 8% in June, after a fire at a major supplier temporarily disrupted supply chains in the previous month.
For now, the combination of industrial output and consumer spending is keeping the U.S. economy on track. Job openings are at a record high, while the unemployment rate is at a nearly two-decade low.
However, MarketWatch reported that tensions between the U.S. and its trading partners could put the brakes on the economy, if those tensions aren’t resolved through compromise.
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- ◦Economy
