Jul 15, 2016 2 min read

U.S. industrial production rose in June by the largest amount in 10 months, led by a strong rebound in auto production.

The Federal Reserve said industrial production increased 0.6 percent last month, the best showing since a similar gain last August.

In May, industrial production fell 0.3 percent.

The key manufacturing sector posted a 0.4 percent rise, reflecting a jump in the output of motor vehicles and parts, which rose by 5.9 percent after having fallen by 4.3 percent in May.

Output at the nation’s utilities rose 2.4 percent as electricity production increased as warmer weather than normal boosted demand for air conditioning.

Output in the mining sector edged up a tiny 0.2 percent, the second small increase after eight straight monthly declines.

Both manufacturing and mining struggled over the past year. Mining, which includes oil production, was battered by a steep drop in oil prices which triggered sharp cutbacks in exploration and production. Manufacturers struggled with falling export sales, reflecting global economic weakness and a strong dollar, which made U.S. goods more expensive overseas.

Despite the rise in June, industrial production fell for three consecutive quarters, dropping at an annual rate of 1 percent in the April-June period after declining at a 1.8 percent rate in the first quarter.

There are now worries about what the June 23 decision by British voters to leave the European Union will do to global confidence. But there are some hopeful signs that manufacturing is beginning to stabilize.

The Institute for Supply Management reported its closely watched index of manufacturing activity expanded for a fourth consecutive month in June. The index rose to a reading of 53.2, up from 51.3 in May. Anything above 50 signals growth.

The ISM index stayed below 50 from October through February before returning to expansion territory in March.