Industrial output rose in July at a slightly better pace than expected as a further rebound in the auto industry offset a big plunge in output at the nation's utilities.
The Federal Reserve reported Friday that industrial production edged up 0.2% last month. That was half the pace of the 0.4% gain in June, but it did surpass analysts' expectations for flat production in July.
The increase reflected a 0.4% gain in output at manufacturing plants. Motor vehicles and parts showed the biggest increase in manufacturing, advancing for a third straight month.
These gains were not seen as signaling a sustained rebound, however, given the problems facing the auto industry this year. Instead, the rebound in auto activity was viewed as a temporary improvement because a strike ended at parts supplier American Axle.
Even with the recent gains, production at auto plants remained 10.4% below where it was a year ago.
The increase in manufacturing helped to offset a big 1.9% drop in output at utilities, a decline which followed a 2.3% surge the previous month. Both changes were seen as weather-related.
