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Industrial production rises in June

The Federal Reserve reported today that industrial production increased 0.9 percent in June, three times May's 0.3 percent increase and the highest increase in 16 months. More than half of the gain came from a 5.3 percent rise in utility output caused by warmer temperatures in June.

Manufacturing output was up 0.4 percent in June following May's 0.5 percent increase. At an annual rate, the index moved up just 1.5 percent in the second quarter. Both gains had followed two months of declines that had raised concerns that manufacturing, the hardest hit sector in the 2001 recession, could be faltering again.

The overall factory operating rate increased 0.2 percentage point last month, to 78.4 percent. The production of durable manufacturing goods rose 0.6 percent and was led by a 2.9 percent gain in motor vehicles and parts output. Among the other major categories of durable goods, the computer and electronic products production rose 0.7 percent in June, and aerospace and miscellaneous transportation equipment output increased 0.9 percent. A decline in the steel output in June contributed to a 2.2 percent drop in the index for primary metals, which fell at an annual rate of 24.7 percent in the second quarter.