US industrial production rose by 0.2% in July, compared with expectations for a larger increase of 0.3% in a survey compiled by Bloomberg, and following an upwardly revised 0.3% increase in June.
Manufacturing production and mining production both increased by 0.2%.
Utilities production increased by 0.5% after a 0.1% gain in June.
Capacity utilization rose to 76.3% in July, as expected, from a 76.2% rate in June.
The monthly industrial production report from the Federal Reserve measures production growth by manufacturers, utility producers and mining operations. The manufacturing data is broken down between products for use in the longer-term (durable) and shorter-term (non-durable), with vehicle production a key component. Also included is capacity utilization, which shows how much spare capacity producers have available.
A stronger-than-expected reading on industrial production is usually bullish for the stock market but may be bearish for the manufacturing, mining or utilities sectors depending on how that portion of the data performed in each month.
Overall, bonds prefer slower industrial production growth as a signal of more modest inflation but in times of tight supply, such as during the pandemic, it is possible to have both sluggish output and rising inflation.