U.S. industrial production inched ahead in August as manufacturing activity increased, a potentially comforting indication that the economy isn't headed toward another recession
. Overall production climbed 0.2%, the Federal Reserve said Thursday, while industries used 77.4% of their capacity.
Economists surveyed by Dow Jones Newswires had forecast flat production and a capacity utilization rate of 77.5%.
Production in July had climbed 0.9%, while capacity utilization was 77.3%.
August factory production rose 0.5%, led by stronger production of autos and parts, as well as other durable goods.
"Motor vehicle and parts production increased an average of 3.1% in July and August but has not yet returned to its level prior to the supply chain disruptions that resulted from the earthquake in Japan," the Fed said.
The March quake and subsequent tsunami caused supply chain disruptions across the auto sector.
In August, motor vehicle assemblies rose to 8.73 million from July's 8.59 million. That was the highest figure since March.
The mining industry also posted a solid increase, with the production index up 1.2% largely due to gains for crude oil, natural gas and coal.
Utility output sank 3.0% as temperatures moderated, the Fed said.
The recession ended about two years ago, and manufacturing helped lead the recovery. Year over year, manufacturing production was up 3.8% from August 2010.
But the sector had slowed markedly earlier in the year, barely managing to stay in positive territory.
Earlier Thursday, the Federal Reserve Bank of New York's Empire State Manufacturing Survey showed that New York manufacturing activity in September contracted for the fourth consecutive month. The Empire State's business conditions index dropped to -8.82 this month from -7.72 in August.
The Philadelphia Fed is scheduled to release a similar report Thursday at 10:00 a.m. EDT.
The Fed's industrial production data don't reflect output by the service sector, which makes up most of the U.S. economy.
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