U.S. industrial production improved on its growth in June, and manufacturing output leapt 1.4 percentage points thanks to a notable increase in motor vehicles and parts production. The latest report from the U.S. Federal Reserve said that industrial production rose 0.9 points in July, a solid improvement compared to the 0.2 points it gained in June.
Motor vehicle and parts production rose by 11.2 percentage points as automakers canceled their usual July factory shutdown, despite an ongoing semiconductor shortage. According to Federal Reserve data, U.S. motor vehicle assemblers were on track in July to put together 9.70 million vehicles and 7.97 million trucks at an annualized rate compared to June’s annualized rate of 8.83 million vehicles and 7.38 million trucks.
The improvement in auto output helped drive increases in consumer durable goods, business equipment, and durable materials, the Federal Reserve said, and durable goods production increased by 2.4 points in July. The machinery, electrical equipment and appliances, aerospace, and miscellaneous durable manufacturing market groups all grew by 1.5 points or more. Growth in plastics and rubber products and textile and product mills drive 0.3 points of growth in nondurable production.
Auto production is still substantially slower than it was in January 2021, when it was about 3.5% higher. July growth in car parts made up about half of the growth in manufacturing output, according to the Federal Reserve.
Total industrial production in July 2021 was 101.1% of its 2017 average—6.6 points better than July 2020 when the U.S. was in the throes of the first COVID-19 wave, but 0.2 points worse than February 2020, just before the pandemic hit.
This article has been updated.