WASHINGTON—U.S. factory output increased much more than expected in August, according to data recently released by the Federal Reserve.The Fed’s industrial production index rose by 0.6 percent that month. Analysts had predicted 0.2 percent. Manufacturing, the single largest component of that index rose by 0.5 per cent for the month, well above predictions of 0.2 per cent.
Capacity utilization, a measure of how much manufacturers are using their available plants and equipment, rose to 77.9 percent, still down from its high of 79.3 last August but up after several consecutive months of declines. Analysts had predicted capacity at 77.6 per cent. 
The industrial production index gathers data from industry groups on products as varied as crude oil, car tyres and plaster board, weighting each by their share of overall production. Economists watch the manufacturing component of the index closely, as it offers the clearest picture of overall growth.
Manufacturing represents only 11 percent of gross domestic product, and 8 percent of US employment, but the industrial production index has both political and economic significance. Manufacturing growth had slowed since September of 2018, as the US and China increased threats and counter-threats in their trade war, showing the consequences that such threats can have on business investment even before tariffs go into effect.