Factory Output Levels Off in May
Data released last week from the Federal Reserve showed a manufacturing climate that is perhaps less volatile. After a 1.1 percent jump in April, which was the largest gain in 38 months, factory output declined by four-tenths of a percent in May.
The dip last month represented the second time in three months that productivity decreased. Analysts say the data reflects broad declines that included reduced production of motor vehicles, business equipment and construction supplies.
An acceleration in the near term looks unlikely given the slowdown in the auto industry, which had been a bright spot in recent years. A failure of businesses to accelerate investment—as they wait for clarity on tax and regulatory reforms—may also weigh on production.
Source: Bloomberg