American auto assembly lines continued working last month, pushing industrial production above analysts' expectations, according to Federal Reserve data Tuesday.
Though vehicle manufacturers continue to struggle with a global shortage of crucial semiconductors, they nonetheless shortened or canceled their typical July factory shutdowns, the Fed said.
That helped to account for a surprise 0.9 percent jump in industrial output last month, was more than analysts had forecast and well above June's 0.2 percent growth.
Manufacturing output rose 1.4 percent, about half of which was due to a 11.2 percent jump in the motor vehicles and parts sector, according to the report.
Despite the gains in the sector, the Fed said motor vehicle production was about 3.5 percentage points below its peak in January of this year.
Mining rose 1.2 percent, but utilities output dropped 2.1 percent.
Ian Shepherdson of Pantheon Macroeconomics said industrial production was gaining at a "solid pace," though he noted the auto sector was volatile, while the drop in utilities was weather driven.
"The manufacturing recovery globally is moderating, and survey evidence shows that the US is not immune," he said in an analysis.
The Fed said US industrial production was 6.6 percent above July 2020, when the country was in the grip of widespread Covid-19 restrictions.
However, it was 0.2 percent below the pre-pandemic level of February 2020 level.
Oren Klachkin of Oxford Economics said "there's still plenty of activity in the pipeline yet to be released."
"We expect supply chain and hiring challenges to slowly diminish, but the Delta variant risks strengthening those headwinds."