Industrial Output Higher Than Expected in August

Washington, DC, Sept. 16, 2009--U.S. factories made more cars, clothing and other goods than expected in August, and inflation remained tame, the Federal Reserve said Wednesday.

The Fed said that output at the nation's factories, mines and utilities rose 0.8 percent in August. Economists expected a 0.6 percent increase. Last month's gain marked the second straight increase after the global recession dried up the appetites of customers worldwide.

Factories boosted production of cars, machinery, food products, clothing and other goods in a fairly broad-based pickup in August, according to the Fed data. The central bank also said industrial production jumped 1 percent in July, twice as much as originally reported. Car production drove that gain.

Production at factories -- the single-biggest slice of overall industrial activity -- also rose for the second straight month. It posted a 0.6 percent gain in August, following a 1.4 percent rise in July.

Car production led the way, rising 5.5 percent last month due mainly to the government's Cash for Clunkers program. That followed a whopping 20.1 percent gain in July as General Motors and Chrysler reopened many plants that had been closed in May and June as the companies restructured and emerged from bankruptcy.

Even with production of autos and parts stripped out, manufacturing activity increased 0.4 percent last month.