Industrial production in the United States turned positive for the first time in three months indicating that American manufacturing may be improving into the second half of the year.
The output of mines, utilities and factories rose 0.31 percent in June, the most since February, after falling 0.04 percent in May and 0.30 percent in April, according to the Federal Reserve in Washington. Analysts in the Reuters poll had predicted a 0.2 percent gain.
Manufacturing output, which accounts for about 12 percent of the economy, rose 0.3%, following an upwardly revised 0.2% gain in May, for the best showing in four months. Economists had forecast a 0.1 percent increase. A 1.3 percent increase in automobile production and a 1.5% percent jump in machinery boosted factory production. Auto manufacture had advanced 0.5 percent in June and machinery, which includes computers and electronic products, had declined 0.7%.
Mining industry output, which encompasses oil drilling, rose 0.8% after increasing 0.4% in May, while the work of utilities declined 0.1 percent, the third fall in a row, having been 2.8 percent lower in May.
Capacity utilization, a measure of the percentage of the industrial base employed, rose 0.1 percent to 77.8 percent, 77.7 percent had been forecast by economists. The twenty year average is 79.0 percent; the thirty year monthly average is 79.7 percent.
The euro rose modestly against the dollar after the release at 8:30 am, opening at 1.3118 and reaching as high at 1.3157 in the morning session. The yen strengthened versus the American currency, trading at 99.37 before the issue and moving to 99.11 a few hours later.
Currency markets are awaiting Federal Reserve Chairman Ben Bernanke's Congressional testimony on Wednesday and Thursday for clues to the central bank's monetary stimulus policy. Mr. Bernanke has recently reasserted that policy will remain accommodative for the foreseeable future.
Chief Market Strategist