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U.S. Industrial Production Increased in July, Beating Forecasts

By Maria Martinez

 

Industrial production in the U.S. rose in July despite rising producer prices and supply-chain disruptions.

Industrial production--which includes factory, mining and utility output--increased 0.6% in July compared with the previous month, according to data from the Federal Reserve published Tuesday.

Economists polled by The Wall Street Journal expected industrial output to rise 0.3% on the month. June's industrial production flatlined, which compares with an initial estimate of a 0.2% drop.

Industrial production increased 3.9% year-on-year in July, the Fed said.

Manufacturing output--the biggest component of industrial production--gained 0.7% in July after having fallen 0.4% in each of the two previous months. The production of motor vehicles and parts rose 6.6%, while factory output elsewhere moved up 0.3%, the report showed.

The U.S. manufacturing sector has remained resilient this year despite the supply-chain bottlenecks and increasing costs that have weighed on factory activity for some time. Manufacturing activity is expected to slow down in the coming months as demand weakens, but the record amount of backlogged orders should support activity as firms are increasingly able to source materials and hire workers, economists say.

Mining output increased 0.7% in July, while utilities output fell 0.8% on month, the Fed said.

Capacity utilization, which reflects how much industries are producing compared with what they could potentially produce, moved up 0.4 percentage point in July to 80.3% in July. Capacity utilization for the manufacturing sector rose to 79.8%.

 

Write to Maria Martinez at maria.martinez@wsj.com

 

(END) Dow Jones Newswires

August 16, 2022 09:44 ET (13:44 GMT)

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