02:28 PM EDT, 07/17/2024 (MT Newswires) -- US industrial production increased more than expected last month as manufacturing output decelerated less than the market predicted, Federal Reserve data showed Wednesday.

Industrial output advanced 0.6% in June, decelerating from May's 0.9% increase but double the consensus for a 0.3% rise in a survey compiled by Bloomberg. Annually, industrial production increased 1.6% last month.

Among major industry groups, manufacturing output rose 0.4% after climbing 1% the month prior, according to the Fed. The consensus was for a 0.1% gain. The index for nondurable manufacturing production increased for the second month in a row, at 0.8% in June. Durable manufacturing was flat after rising 0.7% the month before.

Within nondurables, printing and support output rose 2.6%, while textile and product mills advanced by 1.5%. The only nondurable category that declined was plastics and rubber products, down 0.4%.

Durable production was buoyed by increases of 1.6% in motor vehicles and parts, and gains of 1.5% in both electrical equipment and appliances as well as furniture products. Fabricated metal products were down 1.3%.

Utilities output growth accelerated to 2.8% last month from May's 1.9% rise amid increases in electric and natural gas. Mining production grew 0.3% in June after dropping by 0.7% the month before. Capacity utilization edged up to 78.8% from 78.3% month to month.

Overall, May and June marked the strongest back-to-back production gains since late 2021 and suggest that the manufacturing industry may be picking up momentum before the Federal Reserve begins cutting interest rates, according to a BMO note.

Market predictions for a 25-basis-point rate cut in September reached nearly 94% on Wednesday, up about two percentage points from the day earlier, according to the CME FedWatch tool.