U.S. industrial production surprises to the downside in June

Industrial production in the U.S. shrank unexpectedly last month.

According to the Department of Commerce, in seasonally adjusted terms, total output fell at a month-on-month pace of 0.5% (consensus: 0.1%).

That was on top of a downwards revision to the prior month's estimate of three tenths of a percentage point to show a decline of 0.5%.

Utilities' output was weakest, dropping by 2.6%.

Factory output meanwhile slipped by 0.3%, in part because of lower car production, and May's initially reported increase of 0.1% was marked down to show a drop of 0.2%.

Production in Mining slipped further, by 0.2%.

Total industrial capacity utilisation fell from 79.4% for May to 78.9% in June.

"The upshot here is that most of the manufacturing sector remains in a sorry state, and we see few signs of help on the horizon," said Kieran Clancy, senior U.S. economist at Pantheon Macroeconomics.

"Domestic U.S. capital spending, meanwhile, is suffering under the weight of significantly higher borrowing costs, though capital spending intentions in the regional Fed manufacturing surveys might have bottomed."