US factory output rebounds

US factory production increased by 0.8 percent in July, marking a strong recovery after a 0.3 percent decline in the previous month, the Federal Reserve reported Friday.

Much of the improvement was attributed to strong motor vehicle output, which surged 10.6 percent in July. Car sales jumped 5 percent to 1.5 million units, with luxury brands such as Acura, Audi and Lincoln posting the biggest gains.

Output also increased at clothing and leather companies as well as factories producing plastics and rubber plastics.

Volatile global environment

The Fed suggested that the July rise in production came as manufacturers had adjusted to a string of negative factors such as a strong greenback, tepid economic growth abroad and lower oil prices, which had forced energy companies to slash their orders for equipment and pipelines.

US central bank officials added that overall industrial production - also including mining and utility output - had risen by 1.5 percent over the past year.

This was despite the fact that factories had been battered for much of the current year. Winter storms slowed or even stopped some assembly lines in January and February, the Fed recalled.

Orders for equipment and machinery have suffered as the dollar has gained about 20 percent against a basket of foreign currencies in the past 12 months.

hg/cjc (AP, AFP)