The U.S. industrial sector is proving to be more vibrant than expected despite interest rates rising sharply over the past two years.
Industrial production rose 0.4 percent in August, the Federal Reserve said Friday. That was twice the gain expected by Wall Street.
Capacity utilization jumped to 79.7 percent from 79.5 percent in the prior month. That matches the long-run average for utilization. Economists had expected utilization to retreat.
Manufacturing production was held back by a five percent drop in the output of motor vehicles and parts. U.S. factories produced just 0.1 percent more in August. Excluding the autosector, however, manufacturing output rose at a solid 0.6 percent.
Rising oil prices gave a boost to mining output, which jumped 1.4 percent. The index for gas and oil exploration output rose over three percent for the month.
Utilities rose by 0.9 percent in August, a slowdown after a 4.4 percent gain in July driven by what many media outlets claimed, falsely, was the hottest summer ever on the planet.
Higher borrowing costs have not held back industrial output as much as many economists had expected. Strong consumer demand has helped support the economy and while spending has tapered it shows no signs of going into decline.
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