Vehicle and automotive parts manufacturing played a big role in U.S. industrial production in July.
Vehicle and automotive parts manufacturing played a big role in U.S. industrial production in July.

A newly released report from the U.S. Federal Reserve shows industrial production advanced 0.9 percent in July. Output in the manufacturing sector rose 0.6 percent during the month, largely on the strength of motor vehicle and parts production.

Following is a summary of the July report:

Industry Groups. Manufacturing output increased 0.6 percent in July following gains of 0.2 percent in both May (revised upward) and June. The production index for durable goods manufacturing rose 1.0 percent in July, its largest increase since jumping 1.7 percent in January. Among the major durable goods industries, the largest gain was posted in motor vehicles and parts. In addition, primary metals and aerospace and miscellaneous transportation equipment both rose more than 1.0 percent. The only decreases last month were posted by electrical equipment, appliances, and components and by miscellaneous manufacturing.

The production index for mining increased 1.1 percent in July, while capacity utilization in mining rose to 90.3 percent—a rate 2.9 percentage points above its long-run average. Capacity utilization rates in July at industries grouped by stage of process were as follows: At the crude stage, utilization increased 0.7 percentage point to 88.5 percent, a rate 2.1 percentage points above its long-run average. At the primary and semifinished stages, utilization rose 0.7 percentage point to 74.7 percent, a rate 6.6 percentage points below its long-run average. Finally, at the finished stage, utilization increased 0.5 percentage point to 76.3 percent, a rate 1.0 percentage point below its long-run average.

Market Groups. Production increased for all of the major market groups in July. The output of consumer goods advanced 1.1 percent. Consumer durables recorded a gain of 3.6 percent, while automotive products posted a jump of 5.9 percent to lead the increase in durables. Output also increased for the other major components of durable goods, with gains of nearly 1 percent or more in both home electronics and miscellaneous goods. The output of nondurable consumer goods rose 0.5 percent. Most of the increase of 1.5 percent in consumer energy products reflected the jump in utility output. The production of other nondurables edged up 0.1 percent, as a gain in foods and tobacco was mostly offset by decreases in clothing and chemical products.

The production of business equipment increased 0.6 percent last month, gaining 8.5 percent in the past 12 months. All of the major components of business equipment are substantially above their levels of a year earlier. In July, the indices for information processing equipment and transit equipment rose 1.0 percent and 2.5 percent, respectively, while the index for industrial and other equipment decreased 0.4 percent.

The index for defense and space equipment increased 0.6 percent in July after having fallen 1.1 percent in June. Production for this market group has advanced, on net, since the end of last year, though at a slower pace than during 2010.

The output of construction supplies increased 0.3 percent last month, its second small monthly gain following a large jump in May. By comparison, the production of business supplies gained 0.8 percent in July, increasing only 1.3 percent during the past 12 months. Lastly, the production of materials to be further processed in the industrial sector rose 0.9 percent in July.

The complete July U.S. industrial report is available online.