Manufacturing production increased 0.1% in May after declining 0.6% in both March and April.

This is the beginning of the expected postwar recovery in manufacturing, said Jim Haughey, senior economist for Newport Communications. The computer and electronics industry continued to post the largest increases, up 1.2% from April.
"This is a combination of both more parts and more content per part, so the gain in freight volume is likely only about 0.3%," Haughey said. "Construction supplies production rose 0.3% as the housing market got yet another boost from lower interest rates. No increases are expected in this sector beyond June."
Motor vehicle production declined for a fourth consecutive month. May's 1.1% fall is probably the last big decline before consumers appear at dealer lots with the tax cut in their pocket, he said.
Machinery production slid another 0.4%. A few more monthly declines are possible before the renewed economic recovery reaches the capital goods industries.
Consumer goods production was down 0.1% from April. This is inventory rebalancing after the weak prewar sales. Further declines are unlikely this summer, Haughey said.