Industrial production climbed more than forecast in May, a sign gains in manufacturing are supporting growth as the U.S. economy picks up.
Output at factories, mines and utilities rose 0.6% after a revised 0.3% drop in April that was smaller than previously estimated, the Federal Reserve reported.
The median forecast in a Bloomberg News survey called for a 0.5% increase. Manufacturing, which makes up 75% of total production, also increased 0.6%.
Demand for industrial goods is improving as consumer and business spending strengthen and the economy rebounds from its worst performance in three years. Bigger gains in corporate investment and stronger growth in overseas markets will be needed to provide an additional lift for U.S. producers.
“As the economy improves, so does the manufacturing sector,” said Harm Bandholz, chief U.S. economist at UniCredit Group. “It seems that the economy is gaining some momentum again.”
Estimates of the 79 economists surveyed by Bloomberg ranged from a production drop of 0.1% to a 0.8% gain. The prior month previously was reported as a 0.6% decline.