Factory Output Rises

The Federal Reserve reported bullish news on the United States manufacturing sector this morning. Output from the nation's factories rose 1 percent in July, spurred on by an increase in auto production. The increase in was larger than estimated with analyst expecting a 0.6 percent bump in production. A full range of sectors saw increased production. Production of consumer goods increased 1.1 percent and durable goods rose 4.9% in the month. Construction supplies even saw a small increase of 0.5 percent. Overall, industrial output has risen nearly 7.7 percent throughout the year, cutting through all the negativity about the health of the economy. Investors can take advantage of this bump in output by betting on exchange traded funds within the manufacturing sector. Adding an investment in the Industrial Select Sector SPDR XLI to either the Materials Select Sector SPDR XLB or iShares Dow Jones US Basic Materials IYM gives a broad swath of the entire manufacturing sector. Over the short term, these ETFs should ride high on the bullish news. Over the long term, if the economy is truly strengthening, the ETFs will continue to outperform.