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2d ago

U.S. Industrial Output Flat as Manufacturing Falls in August

Rising energy prices and a fresh Fed rate hike raise the risk that recent factory gains will cool.

Employees work inside a factory in Cartersville, Georgia, U.S. June 8, 2026. REUTERS/Alyssa Pointer
Employees work on the production floor of a company in South Bend, Indiana, U.S., March 23, 2026. REUTERS/Jim Vondruska
A Boeing 737 MAX 10 fuselage is pictured during the opening ceremony for the company's new North Line assembly line, which will produce 737 MAX aircraft, at the Boeing Everett Factory in Everett, Washington, on July 10, 2026. Boeing will mark another step in a marathon comeback July 10, when it commemorates expanded production of the 737 MAX, now an aircraft in heavy demand after earlier disasters tarnished the company's reputation. Commercial airlines chief Stephanie Pope will be joined by other Boeing brass and local government leaders at a ribbon-cutting ceremony for new "North Line" MAX production in Everett, Washington state. Boeing has big plans for the North Line, envisioning a production cadence comparable to that in Renton, 35 miles to the south, which until this week was the exclusive home of MAX assembly. (Photo by Jason Redmond / AFP via Getty Images)
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Overview

  • The Federal Reserve’s G.17 report showed overall industrial production was unchanged and manufacturing output fell 0.3 percent in August, ending a seven‑month run of increases and signaling a loss of momentum in factory activity.
  • The decline was concentrated in durable goods with motor vehicles and aerospace each down about 1.2 percent, and durable manufacturing off 0.5 percent while nondurables were essentially flat.
  • Capacity utilization held at 76.3 percent in August, roughly 3.1 percentage points below its 1972–2025 average, indicating substantial spare factory capacity and limited pricing power for producers.
  • Macro headwinds are building after the Fed’s Sept. 16 quarter‑point rate increase and oil prices above $100 a barrel, which economists say could raise borrowing and energy costs and weigh on further manufacturing growth.
  • Despite the pullback, firms continue targeted investments that support pockets of demand, including Hitachi Energy’s $528 million Mississippi expansion and ArtiCast’s $10.3 million die‑casting plant, which together will add local capacity and jobs.