(fxcue news) - The Federal Reserve released a report on Thursday showing industrial production in the U.S. fell by much more than expected in the month of July. The report said industrial production decreased by 0.6 percent in July after rising by a downwardly revised 0.3 percent in June. Economists had expected industrial production to dip by 0.3 percent compared to the 0.6 percent increase originally reported for the previous month. The bigger than expected decline by industrial production partly reflected a sharp pullback by utilities output, which plunged by 3.7 percent in July after surging by 2.6 percent in June. The Fed said manufacturing output also dipped by 0.3 percent in July after coming in unchanged in June, as motor vehicles and parts output plunged nearly 8 percent. Excluding motor vehicles and parts, manufacturing output rose by 0.3 percent. Meanwhile, the report said mining output came in unchanged in July after edging down by 0.1 percent in the previous month. "Much of last month's sluggishness was concentrated in utilities output, which was hard hit by Hurricane Beryl," said Bernard Yaros, Lead U.S. Economist at Oxford Economics. He added, "A sharp drop in motor vehicle production occurred as auto inventories are no longer as lean as before and new-vehicle affordability has deteriorated substantially, holding back auto sales." The Fed also said capacity utilization in the industrial sector climbed to 78.8 percent in July from a downwardly revised 78.4 percent in June. Economists had expected capacity utilization to decrease to 78.5 percent from the 78.8 percent originally reported for the previous month. Capacity utilization in the manufacturing sector edged down to 77.2 percent and capacity utilization in the utilities sector fell to 71.0 percent, while capacity utilization in the mining sector was unchanged at 88.8 percent.