03:29 PM EDT, 06/18/2024 (MT Newswires) -- US industrial production jumped more than expected in May as manufacturing output returned to growth after two months of declines, Federal Reserve data showed Tuesday.

Industrial output advanced 0.9% last month after remaining unchanged in April, the Fed said. The consensus was for a 0.3% rise in a survey compiled by Bloomberg. Annually, industrial production increased 0.4% in May.

Among major industry groups, manufacturing output climbed by 0.9% last month after declining in March and April, according to the Fed. The consensus was for a 0.3% gain. The index for nondurable manufacturing jumped by 1.1% after decreasing the prior two months. Durable manufacturing production increased 0.6% following a decline in April.

Within nondurables, petroleum and coal products rose 2.8%, while textile and chemicals each advanced by 1.8%. The only nondurable category that declined was printing and support, which slid 1.5%.

Durables was buoyed by gains of 2.6% and 2.3% for wood products and machinery, respectively. Output of computer and electronic products grew 0.8% while motor vehicles and parts edged up 0.6% after falling 1.9% in April. These gains were primarily offset by a 2.6% production decline for furniture and related products.

"Auto production partially reversed the prior month's decline, but higher rates, combined with cost inflation in non-discretionary motor vehicle services, are creating affordability issues for prospective vehicle buyers," Oxford Economics Lead US Economist Bernard Yaros said in a Tuesday note. "Housing-dependent sectors were a mixed bag, with wood products increasing sharply but furniture products taking a dive."

Utilities output slowed to an increase of 1.6% from April's 4.1% rise amid a 2% gain in electric. Mining grew 0.3% in May after dropping by 0.7% the month before. Capacity utilization edged up to 78.7% from April's revised 78.2%.

The better-than-expected May reading creates upside risk to Oxford Economics' forecast that industrial production will hold steady in 2024 after inching up 0.2% in 2023. "After an uneven start to the year, industrial production will edge higher during the remainder of 2024," Yaros said.