Total industrial production increased 1.4 percent in May after posting the largest monthly drop on record in the previous month, according to the Fed. Even so, total industrial production in May was 15.4 percent below its pre-pandemic level in February.
Manufacturing output, which fell sharply in March and April, rose 3.8 percent in May, with the largest gain registered by motor vehicles and parts, the Fed said.
"Re-opening at auto plants around the country led to a more-than-doubling of motor vehicle and parts production," Tim Quinlan, senior economist at Wells Fargo Securities, wrote Tuesday in a note.
"Still, even after that increase in May, the level of output for autos is still less than a quarter of the way back to its peak," he said.
The latest industrial production data came after the Commerce Department reported earlier Tuesday that U.S. retail sales increased by 17.7 percent in May following a record plunge in the prior month.
While White House officials have expressed optimism that the economy will rebound in the second half of the year, economists and public health experts have warned that a hasty reopening of the economy could trigger a second wave of infections, which could reverse the economic recovery.
Over 80 percent of panelists view a second wave of COVID-19 as the greatest downside risk for the U.S. economy through 2020, according to a survey released by the National Association for Business Economics last week.
Latest comments