The automobile industry and makers of machinery led an industrial production increase during the month of June. The report is a welcome respite from the economic disappointments over the past several months.
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The report may signify that the US economy will be led by a rebound in manufacturing. At the same time, the stubbornly high unemployment rate continues to threaten economic expansion, including that on the manufacturing front.
The consumer price index showed no change, indicating that inflation is still not a threat—and won’t be any time soon. Auto sales—a leader in economic strength in this recovery—came in at an increased annual rate of 14.1 million compared to an annual rate of 13.7 million in May. The May number was the lowest so far for 2012.
The manufacturing news indicates that manufacturers are hiring, which means jobs are being created. Jobs create discretionary income for consumers. Consumer spending drives economic growth.
The report is welcome news after month after month of worsening indications that the recovery was stalling out.