A report released by the Federal Reserve on Tuesday showed U.S. industrial production increased by more than expected in the month of July.
The Fed said industrial production climbed by 0.6 percent in July following a revised unchanged reading in June.
Economists had expected industrial production to rise by 0.3 percent compared to the 0.2 percent dip originally reported for the previous month.
“The 0.6% m/m rise in industrial production in July was much stronger than we expected and provides another clear sign that the economy is still in expansionary territory,” said Andrew Hunter, Senior U.S. Economist at Capital Economics.
He added, “That said, the likely drag on manufacturing from the impending global economic downturn means that resilience of production may not last for long.”
The bigger than expected increase in industrial production came as manufacturing output advanced by 0.7 percent in July after falling by 0.4 percent for two straight months.
Mining output also climbed by 0.7 percent in July after jumping by 2.0 percent in June, while utilities output slid by 0.8 percent after slipping by 0.3 percent.
The report also showed capacity utilization in the industrial sector rose to 80.3 percent in July from a revised 79.9 percent in June.
Economists had expected capacity utilization to inch up to 80.1 percent from the 80.0 percent originally reported for the previous month.
Capacity utilization in the manufacturing and mining sectors edged up to 79.8 percent and 88.0 percent, respectively, while capacity utilization in the utilities sector fell to 74.5 percent.
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