U.S. industrial production kept expanding in August, the Federal Reserve said Friday, beating expectations even though the pace of the increase slowed due to sluggish manufacturing growth.
Overall industrial production rose by 0.4%, up from a revised 0.7% a month earlier, the Federal Reserve announced in a statement.
This was above the median expectation of economists surveyed by MarketWatch.
The August reading for manufacturing was up just 0.1%, "held back" by a 5% decline in motor vehicles and parts, the Fed said.
This marked a sharp turnaround from July, when a jump in motor vehicle production helped spur a 0.4% increase in manufacturing, pushing industrial production back into positive territory.
"Overall industrial production rose more than expected in August but manufacturing output matched consensus expectations," High Frequency Economics Chief U.S. Economist Rubeela Farooqi wrote in a note to clients.
"Higher borrowing costs and weaker demand for goods are headwinds for manufacturing," she added.
Factory output rose by 0.6%, while the index for mining was up 1.4% from a month earlier.
Year-on-year, overall industrial production expanded by 0.2%.
The figures will give the Fed additional information ahead of its interest rate decision next week, as it weighs another hike to its key lending rate to cool above-target inflation.
However, traders and analysts expect the U.S. central bank to announce it is holding rates steady on Wednesday to give policymakers more time to assess the health of the world's largest economy.
Copyright 2023, Agence France-Presse
