02:39 PM EDT, 09/17/2024 (MT Newswires) -- US industrial production advanced more than the market projected last month as manufacturing output rebounded, Federal Reserve data showed Tuesday.

Industrial output advanced 0.8% in August following a decline of 0.9% in July. The latest reading outperformed the consensus for a 0.2% rise, according to a survey compiled by Bloomberg. Annually, industrial production was flat last month.

Among major industry groups, manufacturing output rose 0.9% after declining by 0.7% in July, according to the Fed. The consensus was for a 0.2% gain. The index for durable manufacturing production increased 2.1% in August following a 1.5% drop in July. Nondurable manufacturing slipped 0.2% after rising 0.1%.

Durables production growth was driven by a 9.8% increase in automotive products, a 3.2% rise in primary metals and a 2% gain in electrical equipment, appliances and components. The decline in nondurable output was led by a 2.3% decrease in petroleum and coal products and a 1.6% decline in apparel and leather.

"The manufacturing sector has shown some signs of stabilization," Jefferies US Economist Thomas Simons said in a Tuesday note.

Utilities output growth was flat last month compared with July's 3% decline, led by a 0.4% increase in natural gas. Mining production grew 0.8% in August after sliding by 0.4% the month before.

Capacity utilization edged up to 78% from 77.4% month over month, versus the 77.9% Bloomberg expectation.

Also on Tuesday, Census Bureau data showed that US retail sales unexpectedly climbed in August, though the pace of growth slowed amid declined spending at gas stations and on motor vehicles. "It is crystal clear that the time has come for the (Federal Reserve) to start lowering and normalizing interest rates, but as the data stands now, we do not see a reason to act aggressively with cuts bigger than 25 (basis points)," Simons said.