US Industrial Output Rises on Strong Auto Production Ford Motor Co.

US Industrial Output Rises on Strong Auto Production

The data are "likely to be welcomed by the Fed as further evidence of a manufacturing recovery," said Chris Low, chief economist at FTN Financial.

NEW YORK—U.S. industrial production rose in July, with a strong gain in automobile manufacturing offsetting lower output from utilities, the Federal Reserve reported Friday.

Industrial output increased 0.6% in July, far above the revised 0.1% gain in June.

Output of motor vehicles and parts jumped 10.6%. Gains elsewhere in manufacturing rose 0.1%. 

The strength in autos compensated for a 1.0% drop in the index for utilities. 

Manufacturing, accounting for about three quarters of total industrial output, has been under pressure from tepid consumer spending and a stronger dollar weighing on exports.

Analysts welcomed the report, which showed output rising more than the consensus estimate for a 0.3% gain.

The data are "likely to be welcomed by the Fed as further evidence of a manufacturing recovery from the blow dealt by last year's sharp rise in the dollar," said Chris Low, chief economist at FTN Financial.

"Consumers are still spending money, carrying manufacturing through a difficult environment marked by sluggish exports and cautious business investment," Low added.

"The trend in auto output is up, but July auto data in particular can be exaggerated," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics.

"In general, the trend in manufacturing remains weaker than the trend in non-manufacturing, although weakness in manufacturing appears to be past its peak."

Copyright Agence France-Presse, 2015.

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