According to figures released by the Federal Reserve, US factory output grew in July at its fastest rate for nearly a year, suggesting that the recovery from recession might not be stagnating as had been feared after June figures had shown a slight decline.
Industrial production from the country’s factories, mines and utilities increased an overall 1.0 percent, with factory output, the largest single component, rising 1.1 percent.
Although encouraging, these figures have to be seen as the product of an unusual month, when many factories, especially in the automobile sector, continued production throughout the month instead of shutting down for a summer break.
Even without the strong auto sector, however, factory output rose 0.6 percent. The last time factory output increased at such a rate was August 2009, inspired by the government's Cash for Clunkers program. Business equipment production grew 1.8 percent, the highest rise of any major segment.
In July, US factories were operating at 74.8 percent of their capacity, a 0.7 percent increase from June but still well below the historical average of 80.6 percent.
Separate data from the Commerce Department, however, showed that the US housing market remains sluggish. While construction of new homes and apartments rose 1.7 percent last month, the biggest increase was in the building of small apartments which represent only a small proportion of the housing market.
The building of new family homes (80 percent of the market) fell 4.2 percent, and applications for new building permits dropped 3.1 percent.
