Industrial production rises 1.2 percent in May

June 17, 2010 at 12:00a.m.

Associated Press

WASHINGTON

Industrial production rose in May as manufacturing remained a key engine of the economic recovery.

Output at the nation’s factories, mines and utilities rose 1.2 percent in May, the Federal Reserve said Wednesday. That comes after April’s 0.7 percent increase.

Factories — the single biggest contributor to industrial activity — ratcheted up production 0.9 percent. It was the third-straight monthly increase.

Production at utilities increased 4.8 percent as warm weather created more demand for electricity. Mining was the only component that lagged, edging down 0.2 percent.

The gains were felt across every major sector reported by the Fed.

Output of consumer goods was boosted by a strong 2.6 percent gain for consumer durables. Greater production of automotive products and home electronics more than offset declines for home goods, such as appliances, furniture and carpeting.

U.S. factories were operating at 74.7 percent of capacity — an increase of 1 percent from April but still 5.9 percentage points below the average since 1972.

Many businesses are restocking their shelves after slashing inventories during the recession.

Consumers are showing more signs of confidence in the recovery, despite high unemployment and tighter credit.