... so stocks are soaring!
July 15 (Bloomberg) -- Industrial production in the U.S. fell in June at the slowest pace in eight months, adding to signs the worst of the recession is over.
The 0.4 percent decrease in output at factories, mines and utilities was smaller than forecast and followed a revised 1.2 percent drop in May, Federal Reserve figures showed today in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent, the lowest level since records began in 1967.
Factories, after slashing stockpiles in the first half of the year, may get a boost from government efforts to stoke spending, including cash payments aimed at reviving demand for autos. Even so, job losses will weigh on any rebound, meaning companies such as General Motors Co. and Chrysler Group LLC, two of the three biggest U.S. automakers, may be slow to recover.
“We’ll go through a very gradual rebuild,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who correctly forecast the drop in output. “There’s uncertainty about the strength of demand, credit restraints are still there, and we have a weak labor market. The fundamentals point to an economy that won’t just boom off the map.”
Industrial production was forecast to fall 0.6 percent after a previously reported 1.1 percent drop in May, according to the median estimate of 73 economists surveyed by Bloomberg News. Projections ranged from a gain of 0.2 percent to a drop of 1.1 percent.
Manufacturing accounts for about 12 percent of the $14 trillion U.S. economy, the world’s largest.
