Industry Output Declined 0.5% During June --- Drop Was Index's Fourth In the Past Five Months; Retail Sales Rose 0.2%
WASHINGTON -- Output at the nation's factories, mines and utilities fell a sharp 0.5% in June, but retail sales rose 0.2%, the government said.</br></br>The drop in industrial production, which followed a revised 0.4% decline in May and a 0.6% rise in April, was the fourth decline in the past five months and left the index 0.2% below its level a year earlier, the Federal Reserve Board said. The Fed previously reported a 0.6% decrease for May and a 0.4% gain for April.</br></br>The Commerce Department said the June increase in retail sales pushed sales to a level 4.6% above a year earlier. The department said the June increase followed upwardly revised gains of 0.7% in May and 0.9% in April.</br></br>About half of the June drop in industrial production reflected the impact of strikes on output of business equipment, construction supplies and durable materials, according to the Fed. But the board noted that a wide variety of other products also posted declines, with only autos and transit equipment showing significant gains.</br></br>Edward Yardeni, chief economist for Prudential-Bache Securities Inc. in New York, called the output figures "anemic," and said that "a very weak industrial sector is starting to drag down the overall economy." He predicted that industrial output would remain weak as the oil price decline hurts energy-producing regions, manufacturers are battered by overseas competition and businesses hold back capital spending because of uncertainty about tax legislation.