US industrial output growth nearly stalled last month as production cuts at mines and utilities nearly swamped a strong performance at factories, a report from the Federal Reserve showed on Wednesday.
Separate reports showed US business inventories grew more than expected in July and a revival in activity at New York state factories in early September after an August slump.
Production at US factories, mines and utilities rose 0.1 percent last month, the Fed's report showed, well below Wall Street forecasts for a 0.5 percent gain.
August's weak output growth kept US industry operating at 77.3 percent of capacity, the same as July and well shy of levels that would raise concerns about inflation. Economists had expected the use rate to rise to 77.4 percent.
US bond prices slipped and the dollar rose as traders saw manufacturing muscle as a sign the economy was gaining traction after its summer lull, likely keeping the Fed on track to continue slowly ratcheting up borrowing costs. Stocks prices fell as investors turned wary on profits after Coca-Cola Co said its earnings for the rest of the year would come in below expectations.
Helping to take the sting out of the disappointing August output figures were an upward revision to July - to a gain of 0.6 percent from 0.4 percent - and a solid, if slower, rise in factory production. Manufacturing accounts for more than four-fifths of industrial output.
Manufacturing production grew 0.5 percent in August after an upwardly revised 0.9 percent July rise. With production up, factories operated at 76.8 percent of capacity, the highest rate since March 2001.
While overall factory output growth slowed, automakers stepped up production. The vehicle assembly rate rose to an annualised 12.03 million from July's 11.51 million pace.