But the outlook for the industrial sector is uncertain against the backdrop of escalating trade tensions between the United States and its major trade partners, which threaten to disrupt global trade. A strong dollar and shortage of workers also pose a risk to production, with factory surveys suggesting some strain in the supply chain.
“Time will tell if this disruption in foreign trade will slow the overall U.S. economy because manufacturers cannot get what they need to produce goods here for domestic consumption and for exports,” said Chris Rupkey, chief economist at MUFG in New York.
The Federal Reserve said on Tuesday industrial production rose 0.6 percent last month after falling 0.5 percent in May. It accelerated at a 6.0 percent annualized rate in the second quarter after a 2.4 percent growth pace in the first quarter.
Manufacturing output surged 0.8 percent in June after decreasing 1.0 percent in May. A 7.8 percent jump in motor vehicle production buoyed manufacturing output last month. Motor vehicle production declined 8.6 percent in May after a fire at a parts supplier caused a sharp drop in the assembly of trucks.
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