The factory sector came roaring back in President Trump’s first full month in office.
Industrial production in the United States surged in February, rising 0.7 percent, more than triple the 0.2 percent increase economists had expected. The latest data from the Federal Reserve marks a significant expansion in industrial activity, with total output reaching its highest level on record.
Manufacturing output, which accounts for roughly three-fourths of total industrial production, rose 0.9 percent, the largest monthly gain in a year. A particularly notable driver of February’s expansion was the auto sector, where motor vehicle and parts production jumped 8.5 percent. That sharp increase stands in stark contrast to the sector’s performance during the final year of the previous administration, when auto output declined by an average of 0.5 percent per month.
The strength of February’s data offers a striking contrast to some of the more downbeat economic indicators seen in recent weeks. While reports on retail sales and business sentiment have suggested a more sluggish start to the year, the industrial sector appears to be gaining momentum.
Beyond autos, business equipment and construction supplies also posted gains, indicating broad-based strength across key segments of the economy. Meanwhile, mining output—which includes oil and gas drilling—rose 2.8 percent, contributing to the overall expansion in industrial production.
Utility output was the one area of weakness, falling 2.5 percent after a strong gain in January that had been driven by severe winter storms.
With February’s gains, manufacturing output has now climbed to its highest level since October 2022, following two years of stagnation. The industrial sector’s renewed strength suggests that companies are ramping up production, even as they navigate shifts in trade policy and broader economic uncertainty.
Capacity utilization, which measures how fully firms are using their resources, also climbed in February. Overall industrial utilization hit 78.2 percent, the highest level since last June, while factory utilization rose to 77 percent. Higher utilization rates often signal greater confidence in future demand and the need for expanded production capacity.
After an extended period of sluggishness under President Biden, the latest data indicates that the industrial sector may be experiencing a genuine reacceleration.
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