US industrial production slowed in June

The Federal Reserve reported that U.S. industrial production slowed in June, with the index rising only 0.1% month-over-month, below expectations. Capacity utilization edged down to 78.8% from a revised 78.9% in May. Manufacturing output, which accounts for the bulk of industrial production, was flat, while mining and utilities saw modest gains. The data suggests the economy is cooling under the weight of high interest rates, though the slowdown is gradual rather than abrupt. Analysts noted that the softness in manufacturing aligns with weaker global demand and a strong dollar. The Fed has been monitoring such indicators as it considers the timing of potential rate cuts later this year.

Global Impact

Economically, the slowdown in U.S. industrial production adds to evidence of a global manufacturing downturn, as the U.S. is a key consumer of raw materials and intermediate goods. This will weigh on commodity prices, particularly industrial metals like copper and steel, and may pressure emerging market exporters.