The numbers: For the second month in a row, industrial production went up in June. This was due to more people buying cars and air conditioners because it has been so hot this summer.
The Federal Reserve said that output went up 0.6% last month, following a much bigger rise in May. The Wall Street Journal polled economists and found that they thought production would rise by 0.3%.
Important facts: As people turned up their air conditioners to escape the summer heat, gas and electric utilities saw a 2.8% rise in production. Government records show that June was the hottest month ever recorded. The records go back 130 years.
The Federal Reserve also said that the production of cars went up 1.7%.
If you take out the auto and utility sectors, manufacturing production was a little lower.
The Fed said that capacity utilisation went up from 78.3% to 78.8%, but that was still about a full percentage point below its long-term average.
What the number shows is how much of a factory is being used to make things. Some capacity is turned off when business is slow to save money until demand picks up.
In general, the industrial sector of the economy hasn’t done much better in a few years and probably won’t get much better until the Federal Reserve lowers interest rates. High rates have slowed down business investment and slowed down the sale of cars.
In the future: “Over the next few quarters, industrial activity will steadily rise thanks to a new round of rate cuts by the Federal Reserve, strong demand for high-tech goods, and a pick-up in global growth,” said Bernard Yaros, lead U.S. economist at Oxford Economics.
What happened in the market? The Dow Jones Industrial Average (DJIA) went up again, but the S&P 500 (SPX) went down. Both indexes are still at or very close to all-time highs.
