US industrial production rose less than expected in June as manufacturing output stalled, Federal Reserve data showed Friday.
Industrial output ticked up 0.1% last month, matching the increase seen in May, the Fed said. The consensus was for a 0.2% increase in a survey compiled by Bloomberg.
"Industrial production didn't grow as much as expected in June, and manufacturing has noticeably slowed down in the past two months after a strong start to the year," Oxford Economics Lead US Economist Bernard Yaros said in a report emailed to.
Manufacturing output was unchanged following a 0.1% gain in May.
Nondurable manufacturing output turned positive in June with the biggest gains in petroleum and coal products, while the durable component decreased 0.1%.
"The strongest industries were the beneficiaries of higher energy prices, including mining and petroleum and coal products," Yaros wrote.
Mining and utilities output both increased 0.4%, Fed data showed. Natural gas output declined 3.3%.
The headline reading was weak, but not enough to alter Oxford Economics' industrial production forecast that was recently upgraded to account for artificial intelligence spending.
"AI, national defense, and the recovery in aerospace are all themes that will endure over the remainder of the year," Yaros wrote. "Renewed hostilities between the US and Iran are the biggest risk to the outlook, as it would create uncertainty for businesses, threaten the pipeline of AI goods, and potentially derail an inventory restocking cycle."
Earlier this month, separate surveys by the Institute for Supply Management and S&P Global (SPGI) showed that US manufacturing growth moderated in June as higher raw material costs kept input inflation elevated.
