Industrial production rose slightly more than expected in June as manufacturing output picked up speed, a welcome sign for an economy that appears to have slowed sharply in the second quarter.

Output at the nation's factories, mines and utilities rose 0.3 percent last month after an unchanged reading in May, the Federal Reserve said on Tuesday. Economists polled by Reuters had expected a 0.2 percent increase in June.

For the second quarter as a whole, industrial output rose 0.6 percent.

Manufacturing output increased by 0.3 percent last month, beating economists expectation of a 0.1 percent rise, after an upwardly revised 0.2 percent increase in May. Manufacturing was bolstered by a 1.3 percent increase in the production of motor vehicles and parts and a 1.5 percent rise in machinery.

Mining output jumped 0.8 percent and utilities dropped 0.1 percent, a third consecutive monthly decline.

Industrial capacity utilization, a measure of how fully firms are deploying their resources, was barely changed at 77.8 percent, a rate that lies 2.4 percentage points below its estimated long-run average. Economists had expected a reading of 77.7 percent.

Officials at the Fed look at the utilization measures as a signal of how much slack remains in the economy, and how much room growth has to run before it becomes inflationary.