RTTNews - While the Federal Reserve released a report on Wednesday showing a continued decrease in industrial production in the month of June, the rate of decline slowed by more than economists had been anticipating.
The report showed that industrial production fell 0.4 percent in June following a revised 1.2 percent decrease in May. Economists had expected production to fall by 0.6 percent compared to the 1.1 percent drop originally reported for the previous month.
With the slowdown, industrial production fell at its slowest pace since the 1.3 percent jump that was seen in October of 2008.
The Federal Reserve noted that output in the second quarter as a whole fell at an annual rate of 11.6 percent, a more moderate contraction than in the first quarter, when output fell 19.1 percent.
Decreases in output in both the manufacturing and mining sectors contributed to the continued drop in industrial production in June. While manufacturing output fell by 0.6 percent, mining output fell 0.5 percent.
On the other hand, the output of utilities increased by 0.8 percent in June after decreasing in each of the four previous months.
The report also showed that the capacity utilization rate fell to a record low of 68.0 percent in June from a revised 68.2 percent in May. Capacity utilization had been expected to fall to 67.9 percent compared to the 68.3 percent originally reported for the previous month.
While the manufacturing and mining sectors saw modest decreases in capacity utilization, the capacity utilization rate in the utilities sector rose to 79.7 percent from 79.2 percent.
In other economic news, the Labor Department revealed that consumer prices climbed 0.7 percent in June compared to the previous month. Economists had projected an advance of about 0.6 percent.
Compared with last year, consumer prices were down 1.4 percent. This was the largest year-over-year decline since 1950.
Core prices, which exclude the volatile food and energy sectors, advanced 0.2 percent compared to the previous month. Economists had expected an increase of 0.1 percent.
Separately, the Federal Reserve Bank of New York released a report showing that conditions for New York manufacturers were roughly flat in July, with the index of activity in the sector rising to a level close to zero.
The New York Fed said its general business conditions index rose to a negative 0.6 in July from a negative 9.4 in June, with a negative reading indicating a contraction in activity. Economists had been expecting a more modest increase to a reading of negative 5.0.
While the negative reading indicated a slight contraction in activity, the index rose to its highest level since a positive 0.8 in April of 2008.
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