Industrial Production ! Consensus: ! Jul Jun ! Ind Prod: +0.7% ! Industrial Production: +1.0% -0.1%r ! Capacity: 74.6% ! Capacity Utilization 74.8% 74.1% ! Actual: ! ! Ind Prod: +1.0% ! ! Capacity: 74.8% ! By Tom Barkley and Martin Vaughan Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--U.S. industrial production rebounded in July after a slight dip the previous month, in a reassuring sign from a segment of the economy that has helped drive the recovery. Industrial production last month rose 1.0%, the Federal Reserve said Tuesday. June's production figures were revised down to a 0.1% drop from the 0.1% gain initially reported. Capacity utilization also increased, climbing to 74.8% from an unrevised 74.1% the previous month. Still, operating rates remain well below the 1972-2009 average of 80.6%. The report was better than expected, with economists surveyed by Dow Jones Newswires forecasting a 0.7% rise in output and capacity utilization of 74.6%. Manufacturing has been a key area of support for the economy as other segments such as consumer spending have showed signs of weakening. Year over year, industrial production is up 7.7%. The latest Institute for Supply Management's manufacturing index slipped to 55.5 last month from 56.2 in June. While readings above 50 signal expansion, manufacturing activity has begun to moderate. The Fed report, meanwhile, showed most sectors posted output gains in July. Production of motor vehicles and parts jumped 9.9% after a 2.5% decline in June. Excluding autos, production in other parts of the economy expanded 0.6% following a flat performance the month before. Output in the mining industry registered a 0.9% gain on the back of higher crude oil production, with capacity utilization rising to 86.4% from 85.5%. Utilities production rose 0.1% in July, while utilization slipped to 82.7% from 82.8% Defense and space equipment posted a 1.1% gain, due largely to a rebound in cargo plane production following the end of a strike in June. Output of business equipment expanded 1.8%, while home electronics production grew 1.3%. Output by the service sector, which makes up most of the U.S. economy, isn't reflected in the industrial production data. -By Tom Barkley and Martin Vaughan, Dow Jones Newswires; 202-862-9275, tom.barkley@dowjones.com

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