US factory output beats expectations on manufacturing uptick
- Industrial output rose by 0.7 percent month-on-month
WASHINGTON: US industrial production rose more than analysts expected in January, the Federal Reserve said Wednesday, with manufacturing output seeing its biggest gain in nearly a year.
Overall, industrial output rose by 0.7 percent month-on-month, accelerating from a 0.2 percent increase in December, the Fed said.
This was notably higher than the 0.3 percent rise predicted by economists surveyed by Dow Jones Newswires and The Wall Street Journal.
While Donald Trump has promised a manufacturing boom in his second presidency, activity in the sector had been gloomy last year, with sentiment dragged by tariffs and significant trade policy uncertainty.
Conditions appear to have picked up in January, with improvements in new orders and production, but businesses remain wary.
READ MORE: Asia’s factory activity expands on solid global demand
For now, last month’s “0.6 percent increase in manufacturing output was the largest since February 2025, with widespread gains across industry groups,” the Fed said Wednesday.
These included an uptick in durable manufacturing, with gains in areas like computer and electronic products as well as motor vehicles and parts.
But economist Oliver Allen of Pantheon Macroeconomics warned that the solid manufacturing figure was “tempered by the meaningful downward revisions to production in the earlier months, leaving the recent trajectory looking far from impressive.”
“A big share of the gains compared to a year earlier reflect rapid growth in just two sectors: computer and electronics equipment – where AI capital expenditure is in the driving seat – and aerospace equipment led by a turnaround in fortunes at Boeing,” he said.
Separately, mining output dipped 0.2 percent in January, while utilities output rose 2.1 percent, Wednesday’s report showed.
Overall, Allen expects a flagging consumer, weak investment intentions and soft export demand due to trade policy uncertainty to continue weighing on the manufacturing sector in the coming quarters.
Comments