U.S. Factory Output Notches Strongest Gain In 4 Months
US factory production in July posted the strongest gain in 4 months, reflecting a surge in production at auto plants that are still wrestling with major supply chain problems, the Associated Press (AP) reported.
Photo Insert: The mining sector rose 1.2%.
Manufacturing output increased 1.4% last month following a decline of 0.3% in June, the Federal Reserve reported Tuesday. It was the best showing since a 3.4% gain in March.
Overall, industrial production — which includes manufacturing, utilities and mining — posted a 0.9% increase, the best performance since a 2.8% surge in March.
The mining sector, which includes oil and gas production, rose 1.2% as producers continued to ramp up production in response to rising prices for crude oil. Output in the utility sector dipped by 2.1% in July as near record-high temperatures rolled in the West. Other regions enjoyed cooler temperatures.
About half of the 1.4% gain in manufacturing output came from an 11.2% rise in the productions of motor vehicles and parts, reflecting the fact that many auto plants trimmed or canceled their typical shutdowns in July for retooling.
The Fed reported that auto production continues to be constrained by a persistent shortage of computer chips. While the gain in factory output in July was double what had been expected, many economists said that output in the coming months will likely moderate given the ongoing problems with supply chains and labor shortages.