US industrial production grows by more than expected in July

According to the Department of Commerce, total industrial output grew at a month-on-month pace of 0.6% in July.

Economists had penciled-in a rise of 0.3% month-on-month.

Manufacturing output was up by a bigger-than-expected 0.7% over the month (consensus: 0.3%).

The rate of capacity utilization in industry meanwhile increased from a downwardly revised 79.9% in June to 80.3% for July (consensus: 80.1%).

Ian Shepherdson, chief economist at Pantheon Macroeconomics, credited a "huge" 6.7% jump in vehicle output for the rise in both industrial and manufacturing production.

More specifically, he explained, what had been holding vehicle production back year-to-date was a lack of microchips, not of demand.

Likewise, rising vehicle production would cap dealers' margins and put downward pressure on core consumer prices.

So although slower growth in China and Europe were hurting, and that was unlike to change, he expected "output to flatline, more or less, over the next few months, but the auto rebound should keep total manufacturing output above water."