Industrial production increased 0.2% in July after having advanced 0.4% in June. Manufacturing output gained 0.4% in July and was boosted by a rise of 3.6% in the production of motor vehicles and parts. Excluding motor vehicles and parts, the index for manufacturing increased 0.2%.
The output of mines moved up 0.9%, while the output of utilities contracted 1.9%. At 111.8% of its 2002 average, total industrial production was 0.1% below its level of a year earlier. In July, the capacity utilization rate for total industry edged up to 79.9%, a level 1.1 percentage points below its average for 1972-2007.
Daniel J. Meckstroth, Ph.D., chief economist for the Manufacturers Alliance/MAPI, said: The modest spike of growth occurred as manufacturers adjusted production schedules after a major inventory runoff in the second quarter. Tax rebate checks have temporarily propped up consumer spending somewhat and exports remain a significant source of growth. The industrial sector is having a temporary reprieve.
"Unfortunately, housing activity continues to worsen, job losses continue, inflation is rampant, credit is more difficult to obtain, and firms remain cautious about capital investments in the U.S. We think manufacturing will remain in a slow, shallow, downward trend until early 2009."