U.S. industrial production jumped 0.9 percent in July, the biggest monthly gain this year, as factory output was lifted by the automobile sector and unusually hot weather drove demand for energy generated by utilities. Mining output also increased. The Federal Reserve (Fed) reported Tuesday that factory output increased 0.6 percent last month, the biggest rise since the March earthquake and tsunami in Japan, which disrupted supply chains and limited output at some U.S. auto plants. The rebounding auto industry accounted for most of the increase in factory production. Motor vehicles and parts jumped 5.2 percent. Excluding that category, factory output grew only 0.2 percent. Overall output by factories, utilities, and mines has risen almost 13 percent from the recession low in June 2009, but it remains about 6.5 percent below its pre-recession peak in September 2007, the Fed said. Manufacturing had been one of the strongest sectors of the U.S. economy in the two years since the recession officially ended, but it has weakened in recent months. Factory output has posted only one strong monthly gain since February, but economists blamed the decline on temporary factors like the Japan disaster and high fuel prices in the spring. The July manufacturing data is the latest to show the economy accelerated at the start of the July-September quarter after growing at a feeble annual rate of only 0.8 percent during the first half of the year. Consumers spent more on cars, furniture, electronics, and other goods in July, the government reported last week. Another report last week showed jobless claims had dropped below 400,000 for the first time since early July.
