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U.S. industrial production edged up just 0.2 percent in May, compared to 1.4 percent in April, while factory output slipped 0.1 percent, its first slip since January, the U.S. commerce department reported.
Industrial production measures economic activity among manufacturing, mining, and utilities.
Mines’ output rose 1.3 percent; utilities delivered 1 percent more.
Factories in the mid-Atlantic area saw production decline for the first time in two years, according to the Federal Reserve Bank of Philadelphia.
Slower growth in the industrial sector is an additional sign of a slowing overall economy, The Wall Street Journal noted.
Slippage in the industrial economy probably is part of the U.S.’s expected post-COVID recovery, Orin Klachkin, chief economist at Oxford Economics, noted.
“We were at home, locked down, couldn’t go out to restaurants and bars, et cetera, so we tilted our spending away from services and toward goods,” he told the WSJ.
“Now we’re transitioning back to a more normal pattern of spending,” he said.
TREND FORECAST: Yes, consumers are rebalancing their spending between goods and services, but spending in both sectors will continue to fall as prices and interest rates rise together, sending the U.S. economy into Dragflation, our Top 2022 Trend in which consumer spending and overall economic activity will shrink while prices continue to rise.