U.S. industrial production surged 0.4 percent in May, reflecting a jump in factory output, the Federal Reserve (Fed) announced today. Industrial output had fallen 0.3 percent in April. May's rebound in industrial production came as factories raised output by 0.6 percent, even as vehicle production was flat. The gain erased the impact of declines in March and April and eased worries the sector was slumping. The report also showed a 0.1 percent rise in mining production and a 0.7 percent drop in output from utilities. With industrial output rising, U.S. industry had to use more of its productive capacity. The percentage of capacity in use rose to 79.4 percent from 79.1 percent in April. Analysts said the strong industrial performance underscored the fundamental health of the U.S. economy and the potential for future inflation, raising expectations for further interest-rate increases from the Fed. --SP 2304 Local Time 2004 GMT
