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story.lead_photo.caption A worker assembles interior cabinets for a boat recently at Regal Marine Industries in Orlando, Fla. U.S. factory production rebounded in June after a fi re-related disruption at an auto parts supplier caused a slump in May.

WASHINGTON -- U.S. industrial production rebounded last month after being dragged down in May by a fire at an auto parts plant.

The Federal Reserve said Tuesday that industrial production -- which includes output at factories, mines and utilities -- climbed 0.6 percent in June, recovering from a 0.5 percent drop in May. The May reading was warped by a fire at a Michigan parts factory that disrupted production of Ford Motor's F-series pickup trucks, America's bestselling vehicle.

American industry continues to look healthy despite trade conflicts with China, Europe and Canada and a rising dollar that makes U.S. products more expensive abroad.

Factory production rose 0.8 percent last month after falling 1 percent in May. Mining output increased 1.2 percent in June, its fifth straight monthly gain, on increased production by oil and gas companies.

One surprise was a decline in utility output even as temperatures climbed across the U.S. Last month was the third-warmest June on record, according to the National Oceanic and Atmospheric Administration's website.

Utility production dropped 1.5 percent.

Excluding motor vehicles, manufacturing production advanced 0.3 percent after a 0.4 percent drop in May. Separately, motor- vehicle sales remained strong in June, according to company reports from automakers such as General Motors Co. and Ford Motor Co.

Capacity utilization, measuring the amount of a plant that is in use, rose to 78 percent from 77.7 percent in May.

Economic growth clocked in at a lackluster 2 percent annual pace from January through March, but is expected to show 4 percent growth for the April-June period, helped by tax cuts. Unemployment is at 4 percent, consistent with what economists consider full employment.

But the economy could face obstacles. The United States and China -- the world's two largest economies -- are locked in a trade war over American complaints that Chinese companies steal trade secrets and force U.S. firms to hand over technology in return for market access. President Donald Trump has threatened to impose tariffs on up to $550 billion in Chinese goods. That could raise prices for consumers and disrupt manufacturing supply chains.

Trump also angered U.S. allies like the European Union and Canada by imposing tariffs on imported steel and aluminum. He is threatening to target auto imports next.

Meanwhile, the dollar is up nearly 6 percent against other major currencies since mid-April.

The Fed's monthly data are volatile and often get revised. Manufacturing, which makes up 75 percent of total industrial production, accounts for about 12 percent of the U.S. economy.

Information for this article was contributed by Paul Wiseman of The Associated Press and by Shobhana Chandra of Bloomberg News.

Business on 07/18/2018

Print Headline: Production rebounds 0.6% in June

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