Aug 17, 2017 2 min read

WASHINGTON – A slump in the auto industry drove U.S. factory output down in July and has kept it flat for months.

The Fed said Thursday factory production dropped 0.1 percent last month, pulled down by a 3.5 percent plunge in output of cars, trucks and auto parts. Auto production has dropped for three straight months and is down 5 percent over the past year. Auto sales, which have been strong in recent years, skidded 7 percent in July.

The drop in automotive production was partially offset in July by a 0.2 percent rise in other manufacturing output.

Overall industrial production – which adds output by mines and utilities – rose 0.2 percent, the Fed said. Mining output rose 0.5 percent, and utility production rose 1.6 percent.

American manufacturers had bounced back from a slump in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar, which makes U.S. goods costlier in foreign markets. But the Fed says manufacturing output was little-changed from February through July.

Other recent reports on American manufacturing have looked stronger.

The Federal Reserve Bank of New York reported Tuesday factory activity in New York shot up to the highest level in nearly three years.

The Commerce Department reported earlier this month orders at U.S. factories surged in June on strong demand for civilian aircraft. The Institute for Supply Management reported American factories expanded in July for the 11th straight month.

Factories have hired 66,000 workers since July 2016, the biggest 12-month gain in nearly a year and a half.

The Fed inadvertently released the report on its website before the scheduled release time of 9:15 a.m. Eastern.