By Dow Jones Business News, September 16, 2013, 09:29:00 AM EDT
By Jeffrey Sparshott and Eric Morath
WASHINGTON--U.S. industrial output rose in August as auto makers and other manufacturers ramped up production, the
latest sign of a rebounding factory sector.
Industrial output increased a seasonally adjusted 0.4% last month and the use of available production capacity inched
ahead 0.2 percentage point to 77.8%, the Federal Reserve said Monday. Both figures were in line with economists'
Manufacturing, the biggest component of industrial production, advanced 0.7% in August, bouncing back from July's 0.4%
drop. Utility output slid 1.5% while the mining component of the overall index rose 0.3%.
Manufacturing accounts for less than one-fifth of gross domestic product in the U.S., but the sector is scrutinized as
a reflection of the broader economy's health.
In the second quarter of the year, manufacturing industrial production fell at a 0.4% annual rate, a contraction that
continued into July.
But the latest figures from the Fed echo other reports suggesting renewed strength.
The Institute for Supply Management earlier this month said the U.S. manufacturing sector expanded at its quickest
pace in more than two years. And earlier Monday a report from the New York Fed said business conditions for Empire State
manufacturers remain expansionary this month.
Stronger activity has led to more jobs. Manufacturing employment rose by 14,000 in August, the first increase in six
Automobile manufacturing was the strongest category among industry groups in August. Production of motor vehicles and
parts surged 5.2% following a 4.5% dip in July, the Fed said Monday.
Households have been trading in old cars for new vehicles in recent months, returning sales to a level that hasn't
been seen since before the financial crisis.
Other manufacturing industry groups also gained ground. The indexes for wood products, computers and electronics,
electrical equipment, appliances, aerospace, and furniture all advanced at least 1%. The output of construction supplies
advanced 0.3%, the third straight monthly increase and likely a reflection of a still-growing market for new homes.
Overall, U.S. factories have benefited from steady consumer spending at home and better growth overseas. Still, many
economists expect limited gains the rest of the year.
"Acceleration in manufacturing production during the second half of this year is expected, but nothing in the outlook
suggests more than a return to moderate growth," Daniel Meckstroth, chief economist at the Manufacturers Alliance for
Productivity and Innovation, said last week in a report from the trade group.
Write to Jeffrey Sparshott at firstname.lastname@example.org and Eric Morath at email@example.com.
(END) Dow Jones Newswires
Copyright (c) 2013 Dow Jones & Company, Inc.