WASHINGTON -- U.S. industrial output rose by an expected 0.3 percent in July as automotive-related production surged 2.6 percent, offsetting a big decline in utility output, a Federal Reserve report on Wednesday showed.
The July increase in total output for the nation's factories, mines and utilities matched a 0.3 percent rise forecast by Wall Street analysts polled by Reuters, and signaled resilience in the U.S. manufacturing sector.
July manufacturing production rose 0.6 percent for the second month in a row. The total industrial output had risen by an upwardly revised 0.6 percent in June, a reading initially reported as a 0.5 percent rise.
Excluding motor vehicles and parts, industrial output rose just 0.2 percent but manufacturing output rose 0.5 percent.
"We are seeing evidence of a broad manufacturing rebound," said Pierre Ellis, senior economist with Decision Economics in New York. "That compounds the impact of strong exports, suggesting that the domestic economy has a lot of resilience, which should make the Fed more comfortable about hanging tough in this environment."
Story Continues Below
On Tuesday, the Commerce Department said a surge in exports to a record $134.5 billion helped narrow the U.S. trade deficit for June to $58.1 billion. Analysts said unexpectedly strong export growth would lead to upward revisions to second-quarter gross domestic product growth and underpin the economy in the face of the U.S. housing downturn and a tightening of credit amid market turmoil.
The Fed said July utility output fell 2.1 percent due to milder summer weather in much of the United States after a 0.1 percent gain in June.
The gain in July industrial output pushed the overall capacity use rate to 81.9 percent, the highest since September 2006, from 81.8 percent in June. Analysts had been expecting an 81.8 percent reading for July.
Machinery production also rose by 1.1 percent in July, while primary metals production was up 1.5 percent and paper production was up 1.2 percent.
Output of computer and electronic products was up 1.0 percent. Excluding high-technology industries, total output for the month grew 0.2 percent.
© Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.
Editor's note:
The 99 stocks you need to dump in 2007 . . . and the 10 to buy! Get our free report today.
Big Government Lies Exposed. Go Here Now.
Buffett: The best book ever written on investing.
