WASHINGTON (AP) — U.S. manufacturing output rose in May at a solid pace, boosting hopes that the economy is expanding briskly after a dismal first three months of the year.
Americans, buoyed by steady job gains, are buying more cars, while businesses are ordering more machinery and other equipment. Those trends are fueling factory production and driving growth.
Factory output rose 0.6 percent in May after dipping 0.1 percent the previous month, the Federal Reserve said Monday. April's figure was revised upward from an initial estimate of a 0.4 percent decline.
Overall industrial production, which includes manufacturing, mining and utilities, also rose 0.6 percent in May. It had fallen 0.3 percent in April.
Mining output, which includes oil and gas production, jumped 1.3 percent, while utility output declined 0.8 percent, its fourth straight drop.
Industrial production grew 4.3 percent in the past 12 months, the fastest annual pace in nearly two years.
"With manufacturing accelerating, there is every good reason to believe that the economy is beginning to hit its stride," Joel Naroff, president of Naroff Economic Advisors, said in a note to clients.
Last month, factories produced more autos, furniture, industrial machinery, computers and appliances, a sign of healthy consumer and business demand.
The nation's factories are running at 77 percent capacity, the most in six years, though still 1.7 percentage points below the long-run average. As factories move closer to full capacity, factory owners will face pressure to invest in plants and equipment, a trend that could boost the economy.
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