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US industrial output stalls in July

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Industrial production in the United States was flat in July, according to data from the Federal Reserve. This is another sign that US economic growth is still tepid.

Reuters reports that manufacturing production fell by 0.1 per cent, and utility production fell 2.1 per cent. This was offset by a 2.1 per cent gain in output in the mining sector.

The July figures reveal that total industrial production was just 1.4 per cent above the level at the same time last year, and still 11 per cent lower than the average in 2007, before the US economy fell into recession.

Industrial capacity utilization fell slightly to 77.6 percent. This figure is a measure of how fully firms are deploying their resources. Economists say that this level is 2.6 per cent below its estimated long-run average. They had expected a reading of 77.9 percent.

The utilization measures can be viewed as a signal of how much slack remains in the economy, and how much room growth has to run before it becomes inflationary.

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