WASHINGTON • US manufacturing sunk into recession last month after two consecutive quarters of decline amid President Donald Trump's bitter trade wars and a slowdown in China and other trading partners.

The decline comes as the US enters its 11th year of economic recovery and occurs despite Mr Trump's constant pledges to restore America to manufacturing greatness, even though services now drive three-quarters of the US economy.

Despite jumping last month, manufacturing fell by a 2.2 per cent annual rate in the April to June period, and total industrial production lost 1.2 per cent, in both cases the second consecutive quarterly decline, the Federal Reserve said on Tuesday, meeting the technical definition of a "recession" for that sector.

"Manufacturing has borne the brunt of tariff uncertainties and slowing in global economic activity," RDQ Economics said in an analysis.

It comes even as US consumers pushed retail sales higher for the fourth straight month, with shoppers last month taking home more new cars and dining out more often.

Manufacturing jumped 0.4 per cent compared with May, while total industrial production showed no change, said the Federal Reserve report, confounding economists' expectations for a 0.2 per cent gain.

However, economists said the uptick was unlikely to be sustained in the coming months.

"Manufacturing is enduring a mild recession, but it probably won't deepen much further," said Dr Ian Shepherdson of Pantheon Macroeconomics. The downturn in manufacturing is "not news; it is a consequence of China's cyclical slowdown and the trade war", he said.

He predicts the US and China will find a deal to end the trade dispute, meaning that "China's economy will be turning up" by the year end.

Meanwhile, retail sales rose 0.4 per cent last month, double the expected gain, meaning sales are up a solid 3.4 per cent from June last year, showed government data.

The contrary data cast a bit of a cloud over growth figures for the second quarter and could confuse the Fed's interest rate strategy.

However, Fed chairman Jerome Powell doubled down on the case for a cut in the key borrowing rate this month, given weak manufacturing and business investment and concerns about lagging inflation.

He said inflation expectations "are near the bottom of their historical ranges", and despite the Fed's confidence the US economy will continue to grow, many officials feel "the combination of these factors strengthens the case for a somewhat more accommodative stance of policy".

Dr Shepherdson said a rate cut would be premature given his expectation for a recovery in the second half of the year.

But Oxford Economics expects "manufacturing activity and overall industrial production to remain under pressure", and predicts the Fed to produce "three 'insurance' rate cuts over the next nine months".

Along with higher manufacturing, mining output rose 0.2 per cent, and petroleum and coal jumped 2.5 per cent. Mining surged 8.9 per cent in the latest quarter, its 11th consecutive quarterly increase.

But with milder temperatures easing air-conditioning demand, utilities output fell 3.6 per cent last month.

AGENCE FRANCE-PRESSE