WASHINGTON (MarketWatch) -- The nation's factories showed renewed strength in August and the gain in July was much stronger than first thought, the Federal Reserve reported Wednesday.
U.S. industrial production rose 0.8% in August. Output rose a revised 1% in July, double the initial estimate of a 0.5% gain. The gain in July is the largest since October 2008.
Production is up in the past two months after falling in all but one of the past 18 months.
Industrial production has fallen 10.7% over the past year. But Action Economics said that factory output would add 4% to third quarter GDP.
"The industrial production data provide a clear indication that the recession is over and would have been known by Bernanke when he said yesterday that the recession had very likely ended," said the RDQ Economics team in a note to clients.
On Tuesday, Bernanke said it is very likely that the recession has ended.
The rise in production was a bit better than expected. Economists had been anticipating that August's production would rise 0.7%.
Capacity utilization rose to 69.6% in August from 69% in the previous month.
Gains in output were widespread in August. But economists are taking a wait-and-see attitude. They want to see what happens to output now that the government's popular "cash for clunkers" auto incentive program has ended.
Details
Consumer goods production rose 1.3% in August after rising 0.8% in July.
Production in manufacturing expanded 0.6% in August. Excluding motor vehicles and parts, manufacturing rose 0.4%.
The production of automotive products increased 5.8% in August following a 17.1 % gain in July as car assemblies moved up from exceptionally low levels of the first quarter.
The index for business equipment rose 0.6%.
The output of construction supplies was flat in August after rising 0.7% in the previous month.
Materials output rose 0.6% in August.
The output of utilities rose 1.9% in August on the return of hot weather after a mild July.
In a separate report, the Labor Department said consumer prices rose 0.4% in August and the core rate rose 0.1%.
