The production line at the Rouge Electric Vehicle Center in Dearborn, Michigan. Photographer: Jeff Kowalsky/AFP/Getty Images
U.S. factory production rose in July for the first time in three months, boosted by a surge in motor-vehicle output that helped manufacturing to stabilize.
Output increased 0.5 percent from June, erasing the prior month's decline, Federal Reserve data showed Wednesday. Total industrial production, which includes mining and utilities, jumped 1 percent, the most since the start of the year.
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Factory production was led by a 5.2 percent surge in motor-vehicle output. The annualized rate of car assemblies increased to 11.87 million units, the fastest rate since the end of 2018. The data showed that manufacturing output excluding motor vehicles rose just 0.1 percent after falling in the previous two months.
| Metric | Actual | Estimate |
|---|---|---|
| Manufacturing production (month-over-month) | +0.5% | 0.0% |
| Industrial production (month-over-month) | +1% | +0.3% |
Even with the monthly advance, the Fed's index of factory output was down 0.7 percent from a year ago, with manufacturers still facing challenges of a struggling global economy.
What Bloomberg Economists Say…
"With downward revisions of past data accounting for the upward surprises in the July report, and with the headline being driven more so by weather than by demand for core goods, we continue to view the manufacturing landscape as softening as demand for core goods wanes."
— Stuart Paul
While recent surveys of purchasing managers at manufacturers continue to show activity is shrinking, the pace of decline is no longer steepening.
Production of business equipment rose by the most in three months, the Fed's report showed. Output of all consumer goods increased 1.4 percent, the biggest gain since the end of 2020.
Retail sales in July rose by more than forecast and prior months were revised higher, according to government data released Tuesday.
The Fed's report showed capacity utilization at factories, a measure of potential output being used, increased to 77.8 percent. Overall utilization also increased.
Utility output jumped 5.4 percent, the first gain in four months, as higher temperatures across the country bolstered demand for air conditioning. Mining production also rose. Meanwhile, production of defense-related goods continued to rise. The Fed's index of military and space equipment increased another 1 percent in July, to a record.
—With assistance from Augusta Saraiva & Kristy Scheuble.
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