Industrial production rose the most in six months, as automakers boost pickup production

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Workers working on the lines are working on the chassis of the General Motors filling vans at the Flint Assembly plant on June 12, 2019 in Flint, Michigan.

Numbers: Industrial production rose 0.4% in May, a solid and widespread gain supported by increased production of pickup trucks and cars, the Federal Reserve said Friday. This is the largest monthly increase in six months.

Capacity utilization increased slightly by two-tenths of a point to 78.1%.

Economists surveyed by MarketWatch expected a production gain of 0.2% and capacity utilization of 78%.

What happened: Gains were widespread in May, with consumer goods, office equipment, non-industrial supplies and materials production all increasing. The largest increase was recorded in the utility category, the most volatile, which jumped 2.1% due to the ramp-up of air conditioners.

Manufacturing output increased 0.2%, driven by higher automotive product production, while mining output increased 0.1%.

Light trucks climbed at an annualized rate of 8.43 million, up from 7.84 million in April. Automotive assemblies increased from 2.44 million to 2.56 million. Auto sales also proved to be a downtrend for US retail sales in May and General Motors' Big Three.

GM -0.86%

, Ford Motor Co.

F -0.99%

and Fiat Chrysler Automobiles

FCAU, -0.71%

have focused their efforts on vans in particular.

The big picture: With rates, a strong dollar

DXY, + 0.49%

and the slowdown in the global economy, the manufacturing sector has had a turbulent year. Industrial production increased only 2% compared to 12 months ago.

What they say: "The trade war and border issues are still a big problem for US factories, but at least there have been some improvements in May. As in the retail sales report, this does not change the overall picture or expectations of the Fed, but at least it spurs a little less action. – Jennifer Lee, Senior Economist at BMO Economics.

Market reaction: The Dow Jones Industrial Average

DJIA, -0.10%

Friday, concerns about China's economic health began to decline.

The benchmark 10-year Treasury yield

TMUBMUSD10Y, -0.38%

increased after the retail ratio stronger than expected. At 2.097%, it fell again precipitately 3.23% in November.

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