WASHINGTON -- U.S. factory output rose for the sixth consecutive month in July, led by a jump in the production of motor vehicles, furniture, textiles and metals.
Manufacturing production rose 1 percent in July compared with the prior month, the Federal Reserve reported Friday. Factory output in June was revised slightly higher to a 0.3 percent increase. Over the past 12 months, manufacturing has risen 4.9 percent.
In a second report Friday, the Labor Department said wholesale prices in the U.S. rose at a slower pace in July as fuel costs dropped by the most in eight months.
Demand for autos surged 10.1 percent last month, the largest increase since July 2009, the Federal Reserve report said. The broader increase in manufacturing points to stronger growth across the economy, suggesting that manufacturers expect the pace of business investment and consumer spending to improve in the coming months.
"Manufacturing will continue to add to the recovery throughout 2014 and into 2015," said Stuart Hoffman, chief economist at PNC Financial Services.
Overall industrial production, which includes manufacturing, mining and utilities, rose 0.4 percent in July, dragged down by a 3.4 percent drop in production at utilities.
Several other reports suggest that factory production improved this summer.
Manufacturers added 28,000 workers last month, according to the government's jobs report. That builds on the 23,000 employees that factories added in June, a sign that companies expect demand to continue its upward swing.
Separately, the Institute for Supply Management, a trade group of purchasing managers, reported that its manufacturing index climbed to 57.1 in July. That's the highest level since April 2011 and up from 55.3 in June.
Anything above 50 signals that manufacturing activity is growing.
The increase in the index led senior U.S. economist at Capital Economics, Paul Dales, to conclude that "manufacturing payrolls may soon start to rise by close to 50,000 a month."
Factory orders rose a seasonally adjusted 1.1 percent in June compared with the previous month, the Commerce Department reported Tuesday. Orders had fallen 0.6 percent in May after three straight monthly gains.
An 8.4 percent jump in demand for commercial aircraft drove much of the gain, yet orders also picked up for machinery, iron, steel, computers and electronics.
Rising factory output may help the current economic expansion to continue.
The U.S. economy shrank at a 2.1 percent annual rate in the first quarter, although it bounced back at an annual clip of 4 percent in the second quarter.
Most analysts expect the economy to expand at a roughly 3 percent rate in the second half the year.
A 0.1 percent increase in July's producer price index, a measure of wholesale inflation, followed a 0.4 percent gain the prior month, the Labor Department said. The so-called core measure, which strips out volatile food and fuel, increased 0.2 percent.
Global growth has struggled to gain momentum as the U.S. recovery plods on, as Europe grapples with geopolitical tensions and as China contends with a property slump and investment-spending slowdown. Limited price pressures give the Federal Reserve room to maintain an accommodative position as they scale back their monthly bond purchases, which are on pace to end in October.
"Inflation is turning out to be less of a concern than we previously expected," said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. "Businesses are seeing a little bit of a relief as certain commodity prices come down, and we've still yet to see upward pressure in broader services and wages."
Information for this article was contributed by Josh Boak of The Associated Press and Victoria Stilwell of Bloomberg News.
Business on 08/16/2014