Industrial production increases on auto manufacturing

Automakers continue recovering from the March natural disasters in Japan that interrupted auto supply chains, slowing production and sales. 

Production of autos and parts were up 5.2 percent in July, the largest increase of the year and the first gain in four months. 

Manufacturing excluding motor vehicles was up 0.3 percent after a 0.2 percent gain in the prior month.

Manufacturing has led the economic recovery since the recession ended in June 2009, although the sector has slowed down in recent months. 

Capacity utilization, which measures the amount of a factory that’s in use, increased to 77.5 percent, the highest since August 2008. The last time capacity utilization hit 80 was in April 2008.

With widespread hot weather across the United States, utilities jumped 2.8 percent, the most since December. Mining output, including oil drilling, increased 1.1 percent, slightly behind June’s 1.2 percent gain. 

A separate report from the Commerce Department showed that builders began construction on a seasonally adjusted 604,000 homes last month, a 1.5 percent decrease from June. That’s half the 1.2 million homes per year that economists say must be built to sustain a healthy housing market.

In another report, import prices increased in July behind fuel and clothing. Excluding oil, prices were up 0.2 percent, the Labor Department said. 

Meanwhile, prices of agricultural exports from the U.S. dropped 4.3 percent in July, while prices year-over-year are up 25.9 percent.