WASHINGTON—U.S. factory output increased much more than expected in August, according to data recently released by the Federal Reserve.

TEMPE, AZ—American factories expanded at an unexpectedly fast pace in June, another sign of strength for U.S. industry. The Institute for Supply Management, a trade group of purchase managers, says its manufacturing index rose last month to 60.2, the highest level since February and up from 58.7 in May.

WASHINGTON-—U.S. factory activity rose to the highest level in 13 years last month as hurricanes disrupted supplies but drove up demand for manufactured goods. The Institute for Supply Management said its September manufacturing index rose to 60.8 from 58.8 in August, the highest reading since May 2004.