Production at U.S. factories surged in July, boosted by an acceleration in motor vehicle output as auto makers either pared or canceled annual retooling shutdowns to work around a global semiconductor shortage, Reuters reported. Manufacturing output jumped 1.4% last month after falling 0.3% in June, the Federal Reserve said yesterday. Last month, production at auto plants soared 11.2%. The shortage of semiconductors has forced auto companies to adjust their production schedules. The Fed noted that "a number of vehicle manufacturers trimmed or canceled their typical July shutdowns," when they retool their plants. Despite the surge, production of motor vehicles and parts in July was about 3.5% below its recent peak in January 2021, the Fed said. Excluding autos, manufacturing output rose 0.7% in July. Overall manufacturing in July was 0.8% above its pre-pandemic level. Manufacturing, which accounts for 11.9% of the U.S. economy, is being underpinned by strong domestic demand. But that is straining the supply chain, leaving manufacturers struggling with shortages of raw materials and labor.
