US factory production slumps due to tumbling auto production
US factory production unexpectedly fell in July due to a slump in the automotive industry, the Federal Reserve has announced.
Automotive production - which includes the production of cars, trucks and automotive parts - has dropped for three straight months, falling by 3.5% in July.
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The drop in automotive production was partially offset by a rise in other manufacturing output.
Overall, industrial production - which adds output by mines and utilities - rose by 0.2%, the fed said. Mining output rose by 0.5% whilst utility production rose 1.6%.
American manufacturers had bounced back from the slump in late 2015/early 2016, caused by cutbacks in the energy industry and a strong dollar that makes American goods more expensive in foreign markets.
However, since February manufacturing has remained relatively unchanged, says Fed.
Factories have hired 66,000 workers since July last year, making it the biggest 12 month gain in nearly a year and a half.
The Federal Bank of New York announced that factory activity in New York shot up to the highest level in nearly 3 years,
The report from the Federal Reserve Bank was inadvertently released before the schedules released time in what the bank described as “human error.”
Economists polled by Reuters had forecast industrial production increasing 0.3 percent in July.