US Manufacturing Growth Slows

U.S. manufacturing output dropped 0.4 percent last month after three consecutive months of increases although increased utility use caused total industrial production to rise, the Federal Reserve reported.

The 0.1 percent increase in total industrial production resulted from a 2.7 percent increase in utility output caused by hot weather. The increased utility output offset softness in factory production, which makes up 75 percent of the total index.

By The Numbers: ISM monthly U.S. Manufacturing's New Export Orders Index.

The tepid report followed reports that manufacturing in the New York and Philadelphia regions grew more slowly than expected.

The New York Fed’s Empire State Index, which covers manufacturing in New York, northern New Jersey and southern Connecticut, fell to 5.1 in July, the lowest level this year. The Philadelphia Fed’s general economic index dropped to 5.1 in July, the lowest since August 2009, from 8 the prior month. Readings above zero indicate expansion.

The Fed’s report showed U.S. capacity utilization held steady at 74.1 percent last month. The gauge averaged 80 over the past 20 years and suggests inflation remains low.

Output of motor vehicles and parts dropped 1.9 percent in June after a 5.6 percent increase in May. Excluding autos and parts, manufacturing declined 0.3 percent.

Consumer goods production fell 0.6 percent. The output of appliances, furniture and carpeting dropped 1.7 percent after a 1.2 percent decrease in May. Production of business equipment rose 0.9 percent after a 1.4 percent increase in May.

-- Contact Joseph Bonney at jbonney@joc.com.