Auto production leads U.S. factory output rise in August

American factories increased output in August by the most in eight months, helped by a robust month at auto plants – a hopeful sign that manufacturing could help boost economic growth in the second half of the year.

Manufacturing production rose 0.7 per cent last month from July, the Federal Reserve said, which is the biggest increase since December. It followed a 0.4 per cent decline in July.

Automakers increased production 5.2 per cent, after a 4.5 per cent decline in July, and factories stepped up production of other goods, including computers and electronics, furniture, and business equipment.

Overall industrial production rose 0.4 per cent in August following no change in July.

Overall, factory output is the largest component of U.S. industrial production. The jump in industrial production follows a strong reading from the Institute of Supply Management’s manufacturing survey; the ISM survey said U.S. factory activity expanded in August at the fastest pace since June 2011, buoyed by a rise in new orders rose and stronger demand from overseas.