Manufacturing output up big

Nation sees quarterly increase; tariffs, material costs are concerns.

U.S. factory production rebounded in June by the most in four months as the industry regained its footing after a fire-related disruption at an auto parts supplier, Federal Reserve data showed Tuesday.

■ Factory output rose 0.8 percent after falling a revised 1 percent

■ Total industrial production, which also includes mines and utilities, increased 0.6% percent after a revised 0.5 percent decrease

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

The latest results indicate a steady advance in the nation’s manufacturing sector. Factory output climbed at a 1.9 percent annualized rate from April through June, marking the third straight quarterly increase.

Automobile production jumped 7.8 percent in June from a month earlier when it plunged 8.6 percent after a major fire at a parts supplier. Last month’s increase was reflected in increased output of both consumer goods and business equipment.

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

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.

Mining production continued to strengthen on the heels of robust oil and gas well drilling. With the gain, the Fed’s index of mining in June surpassed the previous peak in December 2014.

While manufacturing is likely to keep expanding, headwinds are looming. Prices paid for materials are rising amid concerns about tariffs and supply constraints as businesses report having difficulty keeping pace with demand. Nonetheless, lower corporate and consumer taxes and a strong job market will remain positives for the business investment outlook.

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.

■ Utility output fell 1.5 percent after dropping 0.7 percent the prior month

■ Mining production rose 1.2 percent; with oil and gas well drilling rising 2.9 percent

■ Production of consumer goods increased 0.7 percent, and output of business equipment rose 2.1 percent