The U.S. factory sector experienced a slight increase in June because vehicle manufacturing declined while other sectors showed growth despite ongoing tariff impacts and rising production expenses. The Federal Reserve reported manufacturing output increased 0.1% during June after May’s output was revised upward to 0.3%.
The manufacturing sector experienced a 0.8% year-over-year growth during the second quarter yet its annualized rate decreased to 2.1% from 3.7% during the first quarter. The manufacturing sector showed no change in durable goods production yet nondurable goods manufacturing increased by 0.3% because petroleum and coal products experienced a 3% production rise.
The June production of motor vehicles and parts decreased by 2.6% following a 4.6% increase in May because of unstable market conditions and rising import taxes. The industrial sector faces ongoing challenges because of President Trump’s escalating tariffs which affect 10% of the U.S. GDP.
The production of primary metals increased by 3.1% while aerospace and other transportation equipment production increased by 1.6%. The mining sector experienced a 0.3% decrease in output but utilities production increased by 2.8% because of the heatwave that boosted air-conditioning usage.
The total industrial production showed a 0.3% increase after two months of stagnation but the annual growth rate remained at 0.7%. The U.S. industrial base shows ongoing underutilization because capacity utilization reached 77.6% which remains below its historical average.
