June industrial output rises on factory rebound

WASHINGTON (Reuters) - U.S. industrial output expanded in June on a rebound in manufacturing, a reassuring sign for an economy that has looked wobbly in recent months.

Industrial production grew 0.4 percent last month, the Federal Reserve said on Tuesday. That was in line with analysts' expectations in a Reuters poll of a 0.3 percent gain.

Factory output rose 0.7 percent during the month, snapping back from a sharp decline in May. In its report, the Fed said May's decline was steeper than initially thought.

However, the data still points to a slowdown in economic growth during the second quarter.

Manufacturing output rose at an annual rate of 1.4 percent during the period, compared with a 9.8 percent rate in the first quarter, the Fed said.

Also troubling, one sector of manufacturing played an outsized role in propping up overall production. Stripping away auto production, manufacturing output only edged up 0.1 percent during the second quarter.

Outside the factor sector, utilities output fell 1.9 percent in June.

Capacity utilization, a measure of how fully firms are using their resources, rose to 78.9 percent in June.

(Reporting by Jason Lange; Editing by Chizu Nomiyama)