US industrial output declined for a tenth consecutive month in July but the beleaguered manufacturing sector showed signs of stabilising, according to a US Federal Reserve report released today.
The Fed said industrial production fell 0.1 per cent in the month after a revised 0.9 per cent decline in June. But factory output, the biggest component of production, was flat in the month, the first time since September of 2000 it has not dropped. Factory output had fallen 1 per cent in June.
Industry capacity in use fell to 77.0 per cent in July from a revised 77.2 per cent in June. That was the lowest rate since August 1983, when it also posted a 77.0 rate.
The numbers were stronger than Wall Street had been projecting. Economists had expected output to decline by 0.2 per cent and capacity utilization to fall to 76.7 per cent.
However, the better-than-expected reading is unlikely to deter the Fed from again cutting interest rates when it meets next Tuesday. The Fed has cut rates six times this year already in an effort to stave off recession.