By David Harrison

U.S. industrial production increased in July for the third month in a row, as the economy continues its slow recovery.

Industrial production--a measure of output at factories, mines and utilities--rose a seasonally adjusted 3% in July from June, the Federal Reserve said Friday, following a revised 5.7% rise in June. Economists surveyed by The Wall Street Journal expected a 2.8% increase in July.

Despite the gains, industrial production remains 8.2% below the same month a year ago.

Rubella Farooqi, chief U.S. economist for High Frequency Economics said the July number was "another strong increase in output" but warned that those gains remain fragile.

"Output was boosted by a fuller reopening in July but weak demand and virus outbreaks that can interrupt activity remain a threat," she wrote in a note to clients.

Manufacturing, the biggest component of production, rose 3.4%, driven by a 28.3% increase in car and car parts industries.

Production by utilities was up 3.3%, due to an increased use of air condition because of unusually warm weather. Mining increased 0.8%.

Capacity utilization, a measure of slack in the industrial economy, rose to 70.6% in July from a revised 68.5% in June, the Fed said. Economists had expected capacity utilization to reach 70.2%.

Earlier this month, two surveys of purchasing managers also indicated manufacturing activity was slowly expanding, following a sharp decline in the spring when lockdowns to prevent the spread of the coronavirus pandemic shut down factories and disrupted supply chains.

Write to David Harrison at david.harrison@wsj.com

(END) Dow Jones Newswires

August 14, 2020 10:09 ET (14:09 GMT)