WASHINGTON—American factories revved up in February, a sign of manufacturing-sector strength supported by businesses investing in new equipment.

Industrial production—a measure of total output at U.S. factories, mines and utilities—increased a seasonally adjusted 1.1% in February from the prior month, the Federal Reserve said Friday. It was the largest gain in four months, since production rebounded following several severe hurricanes last summer, and came after output declined 0.3% in January.

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