Scott Garberding, senior vice president of manufacturing for Chrysler Group LLC, is shown with the automaker’s 5,000,000th vehicle produced at the
Scott Garberding, senior vice president of manufacturing for Chrysler Group LLC, is shown with the automaker’s 5,000,000th vehicle produced at the Jefferson North Assembly Plant in Detroit. (AP file)

WASHINGTON (AP) -- U.S. factories increased output in August by the most in eight months, helped by a robust month at auto plants. The gains are a hopeful sign that manufacturing could help boost economic growth in the second half of the year.

Manufacturing production rose 0.7 percent last month from July, the Federal Reserve said Monday. That's the biggest increase since December. It followed a 0.4 percent decline in July.

Automakers increased production 5.2 percent, after a 4.5 percent decline in July. And factories stepped up production of other goods, including computers and electronics, furniture and business equipment.

Overall industrial production rose 0.4 percent in August following no change in July. Mining, which includes oil production, increased but output at utilities fell for a fifth month.

Factory output is the largest component of industrial production. The strong gain adds to other signs that manufacturing could be rebounding from a weak start this year.

Paul Dales, senior U.S. economist at Capital Economics, said U.S. manufacturers were benefiting from stronger growth overseas.

"It makes sense for industry to outperform other parts of the economy when overseas demand is strengthening," Dales said.

The U.S. economy grew at an annual rate of 2.5 percent in the April-June quarter. Many economists predict growth is slowing to an annual rate of around 2 percent in the current quarter.