Industrial Production Rises a Solid 0.4% in July

Strong gains in production of computers helped push U.S. industrial output steadily higher in July, even though some businesses such as auto making throttled back sharply, the Federal Reserve said Tuesday.

The industrial production index, which measures the output of the nation’s factories, mines and utilities, grew 0.4% to 145.3 last month after a 0.2% rise in June, as businesses ran at 82.3% of their maximum operating capacity, up slightly from 82.2% in June.

Analysts said the report reinforced the impression of healthy manufacturing activity, especially in high-tech industries whose products help companies boost output without stoking inflation. This, they said, should be reassuring to Fed policymakers when they meet Tuesday to plot interest rate strategy.

The Fed raised interest rates six times since mid-1999, aiming to slow growth to a safely sustainable pace that will not fire up wage and price rises. It kept rates unchanged at its last meeting June 28.

Manufacturing expanded 0.5% last month after a 0.4% increase in June. The pickup in manufacturing would have been sharper except that auto makers, already starting to retool for next year’s models, cut the assembly rate for vehicles to 12.4 million a year from 13.4 million in June.

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Industrial Production

Index; 1992=100; seasonally adjusted:

July: 145.3

*

Source: Federal Reserve Board