WASHINGTON -- Production at the nation's factories, mines and utilities rose for the seventh straight month in August, continuing slow recovery from a slump caused by economic turmoil abroad.
The Federal Reserve said today that industrial output rose by 0.3 percent last month, following a 0.7 percent increase in July.
Production has been rising since February, after declining in 1998 to the slowest pace in five years.
At factories alone, production rose 0.4 percent, compared with a 0.6 percent increase in July.
The advance was lead by auto-makers. Production of motor vehicles and parts surged by 8.1 percent. Makers of computers and chemicals also increased their output, although production of household appliances, construction supplies and industrial equipment fell.
"The manufacturing sector has clearly turned around," said David Wyss, chief financial economist with Standard and Poor's DRI in Lexington, Mass. "We lost that big drag that we were getting from the Asian economies."
Output by utilities fell by 1.6 percent in August, a decline expected as summer began to wane and use of electricity for air conditioners dropped. During a hot dry July, utility production had risen 2.3 percent.
Mining output in August rose 0.6 percent, after a 0.9 percent increase in July.
Last month's increase in production pushed the overall operating capacity of U.S. industry up slightly to 80.8 percent from 80.7 percent in July. But that's still well below the level at which analysts begin to worry about production bottlenecks, and below average for the last 30 years.
The steady increase this year in industrial output comes after American manufacturers were hard-hit by loss of export sales to nations hurt by the economic slump that began in Asia in mid-1997.
Overall, however, the U.S. Economy has remained strong.
Separately today, Labor Department reported that 288,000 Americans filed first-time claims for unemployment benefits the week ended Sept. 11, down by 4,000 from the previous week.
A four-week moving average of jobless claims, which analysts watch more closely, changed little, falling by just 250 to 288,750.
Economists consider jobless claims levels below 300,000 an indication of an extremely tight labor market. Claims have hovered below that mark for eight consecutive weeks now, and have not strayed far above it all year.
That's good for workers, but economists worry that employers may feel pressure to raise wages and benefits, which could drive up prices.
Already this year, the Federal Reserve has twice raised interest rates as a pre-emptive strike against possible inflation, although consumer prices so far have remained tame.
On Wednesday, the government said the core inflation rate -- minus volatile food and energy prices -- of 1.9 percent for the 12 months ended in August is the lowest in 33 years.
The nation's unemployment rate in August was at a 29-year low of 4.2 percent.