WASHINGTON (Reuters) - U.S. industr

WASHINGTON (Reuters) - U.S. industrial production unexpectedly fell in May as manufacturing and mining activity remained weak, a sign that a strong dollar and spending cuts in the energy sector continued to constrain economic growth.
The softness in the production side of the economy is in stark contrast with upbeat data on retail sales, employment, consumer and small business confidence, which have pointed to a pick-up in growth after a sluggish start to the second quarter.
"Production is under pressure from low oil prices, affecting mining, and the strong dollar, affecting manufacturing. Looking ahead, production is likely to stabilize when the oil industry regains its feet," said Chris Low, chief economist at FTN Financial in New York.
Industrial output slipped 0.2 percent last month after declining 0.5 percent in April, the Federal Reserve said on Monday. Industrial production has been weak since December and economists had expected output to rise 0.2 percent last month.
The weak industrial production data was likely to get the attention of Fed officials at their policy meeting on Tuesday and Wednesday, economist said.
While the U.S. central bank's policy-setting committee is not expected to raise interest rates at this week's meeting, it is likely to tighten monetary policy later this year.
Industrial production last month was held down by a 0.2 percent drop in manufacturing output. Manufacturing has been whacked by dollar strength, which has eroded profits of multinational corporations.
Companies like Microsoft Corp (O:MSFT) and Procter & Gamble Co (N:PG), the world's largest household products maker, and healthcare conglomerate Johnson & Johnson (N:JNJ) have warned the dollar will hit sales and profits this year.
The dollar has gained about 13.2 percent against the currencies of the United States' main trading partners since last June.
U.S. financial markets were little moved by the data as investors kept a wary eye on Greece, which inched closer to defaulting on its debt. The dollar rose against a basket of currencies, while stocks on Wall Street fell. Prices for U.S. Treasury debt rose.
WEAK ORDERS
While motor vehicle production increased solidly last month and machinery, and computer and electronic products rose, that was insufficient to offset the drag on manufacturing output from declines in the production of electrical equipment, appliances and components, fabricated metal products and wood products.
Manufacturing, which accounts for 12 percent of the U.S. economy, was also weighed down by declining production of nondurable goods such as food and petroleum products. It is likely to remain weak in the months ahead.
In a separate report, the New York Fed said its Empire State general business conditions index fell to a reading of minus 1.98 in June from 3.09 in May.
That was the weakest reading since January 2013 and the second negative reading in the past three months. A gauge of new orders contracted, while shipments edged down. While a measure of unfilled orders increased last month, it remained in contraction territory, indicating order books remained weak.
"Manufacturers will continue to struggle with the impact of the dollar's rise for some time yet," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto.
But given manufacturing's small share of the economy and recent signs of a sharp pickup in growth in the non-factory sectors, Ashworth said "there is every reason to believe that GDP growth will average between 2.5 percent to 3.0 percent annualized over the rest of this year."
GDP contracted in the first quarter, slammed by bad weather, port disruptions, the dollar and energy spending cuts.
Last month, mining production fell 0.3 percent as oil and gas well drilling and servicing fell 7.9 percent. That took the cumulative drop since the end of 2014 to 51.8 percent. But the pace of decline in oil and gas well drilling and servicing is moderating, suggesting the worst of the spending cuts is over.
Companies like Schlumberger (N:SLB), the world's No. 1 oilfield services provider, and Halliburton (N:HAL) have slashed their capital spending budgets for this year. Caterpillar Inc (N:CAT) has cut its 2015 profit outlook and warned that lower oil prices would hurt its energy equipment business.
Oil and gas production, however, increased 0.5 percent in May. Unseasonably warm weather in May lifted demand for air conditioning. Utilities production increased 0.2 percent after dropping 3.7 percent in April.
Industrial capacity use fell to 78.1 percent last month, the lowest since January 2014, from 78.3 percent in April.
Officials at the Fed tend to look at capacity use as a signal of how much "slack" remains in the economy and how much room there is for growth to accelerate before it becomes inflationary.

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WASHINGTON (Reuters) - U.S. industri produksi tiba-tiba jatuh Mei sebagai manufaktur dan kegiatan pertambangan tetap lemah, tanda bahwa dolar yang kuat dan pengeluaran luka di sektor energi terus membatasi pertumbuhan ekonomi.Kelembutan di sisi produksi ekonomi sangat kontras dengan optimis data penjualan ritel, Ketenagakerjaan, konsumen dan kepercayaan bisnis kecil, yang telah menunjuk ke pick-up di pertumbuhan setelah Volanti pada kuartal kedua."Produksi adalah di bawah tekanan dari harga rendah minyak, pertambangan, dan dolar kuat, mempengaruhi manufaktur. Ke depan, produksi mungkin untuk menstabilkan ketika industri minyak mendapatkan kembali kakinya,"kata Chris Low, kepala ekonom di FTN keuangan di New York.Output industri tergelincir 0,2 persen bulan lalu setelah menurun 0,5 persen di bulan April, Federal Reserve mengatakan pada hari Senin. Produksi industri telah lemah sejak Desember dan ekonom yang diharapkan output naik 0,2 persen bulan lalu.Data produksi industri yang lemah adalah mungkin untuk mendapatkan perhatian dari pejabat Fed pada pertemuan kebijakan mereka pada hari Selasa dan Rabu, kata ekonom.Sementara Komite pengaturan kebijakan bank sentral AS tidak diharapkan untuk menaikkan suku bunga pada pertemuan minggu ini, itu mungkin untuk mengencangkan kebijakan moneter tahun ini.Produksi industri bulan lalu diadakan oleh 0,2 persen penurunan output manufaktur. Manufaktur telah memukul oleh kekuatan dolar, yang telah terkikis keuntungan perusahaan multinasional.Perusahaan seperti Microsoft Corp (O:MSFT) dan Procter & Gamble Co (N:PG), di dunia pembuat produk rumah tangga terbesar dan kesehatan konglomerat Johnson & Johnson (N:JNJ) telah memperingatkan dolar akan memukul penjualan dan keuntungan tahun ini.Dolar telah memperoleh sekitar 13,2 persen terhadap mata uang mitra dagang utama Amerika Serikat sejak bulan Juni.Pasar keuangan AS dipindahkan sedikit oleh data sebagai investor terus mata yang berhati-hati di Yunani, yang inchi lebih dekat ke defaulting utang mereka. Dolar naik terhadap sekeranjang mata uang, sementara saham di Wall Street jatuh. Harga US Treasury utang naik.LEMAH PESANANSementara kendaraan bermotor produksi meningkat bulan yang kokoh dan mesin, dan komputer dan produk elektronik mawar, yang cukup untuk mengimbangi drag pada output manufaktur dari penurunan dalam produksi peralatan listrik, peralatan dan komponen, fabrikasi produk logam dan kayu produk.Manufaktur, yang menyumbang 12 persen dari ekonomi AS, juga terbebani oleh penurunan produksi barang-barang tidak tahan lama seperti produk makanan dan minyak bumi. Ada kemungkinan untuk tetap lemah di bulan depan.Dalam laporan terpisah, the Fed New York mengatakan Indeks kondisi bisnis umum Empire State jatuh untuk membaca minus 1,98 pada bulan Juni dari 3.09 pada bulan Mei.Itu adalah pembacaan terlemah sejak Januari 2013 dan kedua pembacaan negatif dalam tiga bulan. Ukuran dari pesanan baru dikontrak, sementara pengiriman bermata turun. Sementara ukuran order terisi meningkat bulan lalu, itu tetap di wilayah kontraksi, menunjukkan urutan buku tetap lemah."Produsen akan terus berjuang dengan dampak dolar meningkat untuk beberapa waktu lagi," kata Paul Ashworth, kepala ekonom US modal ekonomi di Toronto.Tetapi mengingat manufaktur di bagian kecil dari ekonomi dan hari tanda-tanda pickup tajam dalam pertumbuhan di sektor non-pabrik, Ashworth berkata "tidak ada alasan untuk percaya bahwa pertumbuhan PDB akan rata-rata antara 2,5 persen menjadi 3.0 persen annualized selama sisa tahun ini."PDB dikontrak di kuartal pertama, membanting oleh cuaca buruk, gangguan port, dolar dan energi pemotongan belanja.Bulan lalu, produksi pertambangan turun 0,3 persen sebagai minyak dan gas pengeboran sumur dan servis jatuh 7,9 persen. Yang mengambil drop kumulatif sejak akhir tahun 2014 untuk 51.8 persen. Tapi kecepatan penurunan minyak dan gas pengeboran sumur dan servis moderator, menunjukkan yang terburuk dari pemotongan pengeluaran atas.Perusahaan seperti Schlumberger (N:SLB), penyedia jasa ladang minyak No. 1 di dunia, dan Halliburton (N:HAL) telah memangkas anggaran belanja untuk tahun ini modal mereka. Caterpillar Inc (N:CAT) telah memotong outlook 2015 keuntungan nya dan memperingatkan bahwa harga minyak yang lebih rendah akan menyakiti bisnis peralatan energi.Produksi minyak dan gas, namun, meningkat 0,5 persen di bulan Mei. Musimnya hangat cuaca di Mei mengangkat permintaan untuk AC. Utilitas produksi meningkat 0,2 persen setelah menjatuhkan 3,7 persen di bulan April.Menggunakan kapasitas industri jatuh ke 78,1 persen bulan lalu, terendah sejak Januari 2014, dari 78.3 persen pada bulan April.Pejabat Fed cenderung melihat menggunakan kapasitas sebagai sinyal berapa banyak "kendur" tetap dalam perekonomian dan seberapa banyak ruang yang ada bagi pertumbuhan untuk mempercepat sebelum menjadi inflasi.