U.S. factory production down in July, reflecting drop in auto output

Output at factories in the U.S. declined slightly in July, reflecting what analysts say is a drop in auto production.

The decline was expected to be temporary given the banner sales year automakers are having.

The Federal Reserve says manufacturing output edged down 0.1 per cent in July compared with June.

It was the first drop since declines in March and April.

July’s weakness reflected a 1.7 per cent drop in production of motor vehicles and parts. That decline should be reversed in coming months as automakers ramp up production for the new model year.

Overall industrial production, which includes factories, mines and utilities, was flat in July after a 0.2 per cent rise in June. A sharp 2.1 per cent surge in mining was offset by a 2.1 per cent drop in utility output.