Production at America’s factories, utilities and mines surged last month, but remained well below pre-pandemic levels.
The Federal Reserve said Wednesday that U.S. industrial production rose 5.4% in June, the second straight monthly gain that included a 1.4% uptick in May. But it was still 10.9% below the level in February before the economy virtually shut down in the face of the coroanavirus.
The June performance was better than the forecasts of most economists and reflected the reopening of many parts of the U.S. economy after lockdowns in the spring.
Despite the gains in May and June, industrial production dropped at a 42.6% annual rate in the second quarter, worst since the American economy demobilized in the aftermath of World War II. Industrial production had plunged a record 12.7% in April.
Factory production jumped 7.2% in June. Production of cars and auto parts surged 105%. Still, auto industry output remains nearly 25% below February levels.
Production at utilities climbed 4.2% last month as a rebounding economy drove up demand for power. But mining output sank 2.9%, the fifth straight drop, pulled down by plummeting oil and gas production.
The rebound in industrial production may not last. A resurgence in COVID-19 cases is forcing governors in the South and West to pause or reverse the economic reopening.
“The road to a full recovery will be much slower compared to the initial strong bounce of the past two months that was prompted by the relaxation of social distancing measures,” Oren Klachkin and Gregory Daco of Oxford Economics wrote in a research note. “The virus’ resurgence in many states in recent weeks has already led to the re-imposition of social distancing measures that will drag on the recovery and bolster already significant headwinds facing the industrial sector.”