Industrial Production Slips in June

Thu Jul 15, 2004

WASHINGTON (Reuters) - Output at U.S. factories, mines and utilities fell unexpectedly in June, recording its largest drop in more than a year, the Federal Reserve reported on Thursday.

The Fed said industrial production fell 0.3 percent in June after a downwardly revised 0.9 percent May increase. Wall Street had expected the June reading to be flat.

The report suggested a possible cooling of the U.S. factory sector after several months of revival. It may also reflect the effect of a mourning period for U.S. President Ronald Reagan on June business activity.

The overall industrial production drop was the largest since April 2003, when it fell 0.6 percent.

Manufacturing output fell 0.1 percent, its first drop in 13 months, the Fed said. Utilities output decreased 2.3 percent, due to cooler-than-normal temperatures in the United States.

Companies also operated at a lower rate in June, at 77.2 percent of full capacity, down from a revised 77.6 percent capacity use rate in May.

Analysts had expected a 77.7 percent capacity use rate for June.

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