US industrial output drops sharply in May
US industrial production fell sharply in May, the government said Tuesday in an indication that the sector remains mired in deep recession.
By Agencies |
WASHINGTON: US industrial production fell sharply in May, the government said Tuesday in an indication that the sector remains mired in deep recession.
Industrial output decreased 1.1 percent after having fallen a revised 0.7 percent in April, according to data released by the Federal Reserve. Analysts had expected a 1.0 percent drop.
The average decrease in industrial production during the first three months of the year was 1.6 percent, the central bank said.
Manufacturing was the biggest drag among major industrial groups, falling 1.0 percent in May with broad-based declines across industries, including the ailing auto sector, the figures showed.
Analysts said that while the industrial output decline had eased since the collapse of the Lehman investment bank in September last year at the peak of the financial crisis, the sector was struggling to emerge from recession.
"The rate of decline has slowed from terrible post-Lehman plunge but this is still a sector in deep recession, with no signs of any recovery in the data, despite the uplift in the ISM manufacturing survey," said Ian Shepherdson, chief US economist with High Frequency Economics.
The Institute of Supply Management (ISM) earlier this month said that its index of the manufacturing sector, also known as the purchasing managers (PMI) index, rose to 42.8 percent in May from the 40.1 percent reported in April.
The figure was a bit above the 42.3 expected by most analysts and the highest level since September.
"That might just be a case of lags between the survey and the hard numbers, but when we look at the massive inventory overhang in both the manufacturing and wholesale sectors it is easy to believe output needs to keep falling for some time yet," Shepherdson said.
Since the recession began in December 2007, industrial output has increased in only two months.
Industrial output decreased 1.1 percent after having fallen a revised 0.7 percent in April, according to data released by the Federal Reserve. Analysts had expected a 1.0 percent drop.
The average decrease in industrial production during the first three months of the year was 1.6 percent, the central bank said.
Manufacturing was the biggest drag among major industrial groups, falling 1.0 percent in May with broad-based declines across industries, including the ailing auto sector, the figures showed.
Analysts said that while the industrial output decline had eased since the collapse of the Lehman investment bank in September last year at the peak of the financial crisis, the sector was struggling to emerge from recession.
"The rate of decline has slowed from terrible post-Lehman plunge but this is still a sector in deep recession, with no signs of any recovery in the data, despite the uplift in the ISM manufacturing survey," said Ian Shepherdson, chief US economist with High Frequency Economics.
ADVERTISEMENT
The Institute of Supply Management (ISM) earlier this month said that its index of the manufacturing sector, also known as the purchasing managers (PMI) index, rose to 42.8 percent in May from the 40.1 percent reported in April.
The figure was a bit above the 42.3 expected by most analysts and the highest level since September.
"That might just be a case of lags between the survey and the hard numbers, but when we look at the massive inventory overhang in both the manufacturing and wholesale sectors it is easy to believe output needs to keep falling for some time yet," Shepherdson said.
Since the recession began in December 2007, industrial output has increased in only two months.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
