US industrial production rose in August as a bounce back in motor vehicle assembly lifted manufacturing output, a hopeful sign for the economy after growth got off to a slow start in the third quarter.
Though another report showed a slight pull back in factory activity in New York state this month, businesses were upbeat about the future and new orders and shipments jumped.
That all points to a pick up in manufacturing after it hit a speed bump in the spring.
Industrial output increased 0.4% last month after being flat in July, the Federal Reserve said. The rise was in line with economists' expectations.
In a separate report, the New York Federal Reserve said its Empire State general business conditions index slipped to 6.29 from 8.24 in August. A reading above zero indicates expansion.
However, firms expected an improvement in the months ahead. The index of six-month business conditions touched its highest level in nearly 1-1/2 years in September.
In addition, a gauge of new orders rose sharply after almost stalling in August. Shipments surged to their highest level in more than a year.
The industrial production report showed manufacturing production advanced 0.7%, more than reversing the prior month's 0.4% drop, as automobile assembly rebounded 5.2% after slumping 4.5% in July.
But revisions to July's manufacturing data to show a big drop in output took some of the shine from the August recovery.
Still, the industrial production report, which showed gains almost across the board, pointed to some underlying momentum in factory activity, which could support views of only a mild slowdown in economic growth this quarter.
That should keep the Federal Reserve on course to announce cuts to its monthly bond purchases when policymakers meet on Tuesday and Wednesday to assess the economy's health.
Utilities output fell for a fifth consecutive month in August. Mining production rose 0.3% last month, but that was a big step back from July's 2.4% increase.
Last month, the amount of industrial capacity in use edged up to 77.8% from 77.6% in July.
Industrial capacity utilization - a measure of how fully firms are using their resources - was 2.4 percentage points below its long-run average.
Officials at the Fed tend to look at utilization measures as a signal of how much "slack" remains in the economy, and how much room growth has to run before it becomes inflationary.
