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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Cary Salsberg who wrote (10394)	6/16/2004 11:38:54 AM
From: Proud_Infidel	Respond to of 25522

Industrial Production Rose Sharply in May Wednesday June 16, 10:01 am ET WASHINGTON (Reuters) - Output at U.S. factories, mines and utilities surged in May, posting its biggest gain in almost six years, the Federal Reserve reported on Wednesday. The Fed said industrial production rose a larger-than-expected 1.1 percent in May after a 0.8 percent gain in April. The May increase was the biggest since a 2.0 percent rise in August 1998. While the Fed said "unseasonably warm weather" caused utilities output to surge, the gain in overall production was broad-based and reflected the continued revival in the U.S. factory sector, which began declining ahead of the 2001 recession. "The numbers show the manufacturing sector has very solid forward momentum," said Anthony Karydakis, senior financial economist with Banc One Capital Markets in Chicago. Companies also operated at a faster rate in May, at 77.8 percent of full capacity, up from April's revised 77.1 percent capacity use rate and the highest pace since May 2001. Wall Street had been expecting a smaller rise of about 0.8 percent, and capacity use to rise to 77.5. Factory production, which comprises more than four-fifths of overall industrial output, rose 0.9 percent in May, its biggest gain since February. Capacity in use also rose to 76.4 percent, its highest level since April 2001. The gain came despite a third straight monthly decline in auto and parts production in May. Output dipped 2.3 percent after a April's 0.3 percent drop and auto assemblies fell to an 11.87 million annual rate. "We have some ways to go before capacity utilization reaches a level of full capacity in the sector, somewhere in the 82 or 83 percent area. So there is still some slack in the sector to be absorbed, and there is every reason to expect that will continue to be absorbed," Karydakis said. Utilities production, which makes up about 10 percent of total output, posted a 3.3 percent increase, while mining production dipped 0.4 percent.