The monthly gain follows a 0.1 percent increase in June.
"Utilities grew 2 percent, the fourth consecutive monthly increase, as both electricity production and natural gas distribution advanced," the agency said. "Manufacturing grew 0.6 percent in July after declining 0.7 percent in June."
Other gainers included retail trade, which rose 0.6 percent and wholesaling, which was up 0.2 percent, the report said.
The overall mining and oil and gas extraction sector declined 0.3 percent in July. Excluding oil and gas, mining extraction grew 0.3 percent in July, the agency said.
Construction edged down 0.1 percent in July and the output of real estate agents and brokers declined 1.5 percent, down for a third consecutive month, the report said.