The White House was quick to play down concerns that the economic soft spot would last.

"You have to look at the overall body of evidence in the indicators," White House spokesman Scott McClellan told reporters. "We are seeing a strong, sustained recovery. The economy continues to strengthen."

Analysts agreed.

"June industrial production suggests the economy took a rest in June and the other data suggest this was just a pause for breath," said chief U.S. economist Ian Morris at HSBC Securities in New York.

Output at U.S. factories, mines and utilities fell unexpectedly in June, recording its largest drop in more than a year. Industrial production fell 0.3 percent in June after a downwardly revised 0.9 percent May increase. Wall Street had expected a flat reading.

But separately, the Federal Reserve Bank of Philadelphia said its index for business conditions in the mid-Atlantic region rose to 36.1 in July from 28.9 in June.

Forecasts had been for a fall to 25.0 and the result bodes well for the third quarter.

"This report looks very good. It supports what we saw from the Empire State survey earlier today. Factory activities are accelerating again after a June lull," said Parul Jain, deputy chief economist at Nomura Securities International.