Industrial production increased 0.1% last month following a downwardly revised 0.8% gain in June. Consensus expectations had been for a 0.5% rise. Factory sector output also slowed to half the prior month's gain and rose 0.2% (3.1% y/y) in July.

Lower motor vehicle production, off 2.3% (+4.4% y/y), was responsible for much of last month's weakness in output growth. Less motor vehicles, factory output rose 0.3% (2.8% y/y) after a 0.2% June increase.

With a 2.6% (19.0% y/y) spike, output of computers & peripheral equipment posted the largest one month increase since January. Excluding the high tech sector as well as autos, factory output rose 0.2% (1.8% y/y).

Output of industrial & other equipment jumped 1.3% (1.8% y/y) and furniture output rose 0.4% (-1.9% y/y). On the weak side was nondurable goods which fell 0.2% (+1.2% y/y).

Total capacity utilization dipped to 79.7% and capacity grew 1.1% y/y. Factory sector utilization was stable at 78.3%, up from 77.0% last July and capacity rose 1.3% y/y.

The Relationship Between Capacity Utilization and Inflation from the Federal Reserve Bank of Philadelphia can be found here.