US industrial production increased 0.7% in September, beating the 0.4% consensus, as utilities and semiconductors outpaced a softer manufacturing base. Capacity utilization came in at 76.9%, while motor vehicle output fell sharply.
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US industrial production rose 0.7% in September, above the 0.4% expected, while the prior reading was revised to +0.1% from 0.0%. The gain was heavily influenced by utilities, which increased 3.5%, with electric utility output up 3.7% month-over-month and 9.6% year-over-year. The utility operating rate climbed 2.3 percentage points to 73.8%, and utilities output expanded at a 14.8% annualized pace in the third quarter. The report noted that the year-over-year trend is consistent with data-center load, though weather may also have contributed to the monthly jump.
Manufacturing output rose 0.3% in September, matching expectations, after a prior reading revised to -0.2% from -0.3%. Semiconductor output climbed 2.1% month-over-month and 19.9% year-over-year, expanding at a 28.4% annualized rate in the third quarter and driving most of the 3.8% gain in durable goods. Excluding high-tech, factory output rose just 0.2% month-over-month and 0.7% year-over-year, showing that the tech segment is carrying the broader manufacturing figure. This divergence means the headline manufacturing number masks softer conditions in many non-tech categories.
Motor vehicles and parts fell 3.0% in September, with vehicle production down 5.4%. Assemblies dropped to a 10.21 million annual rate from 10.61 million in August and 11.0 million in May, a decline that weighed on the overall manufacturing reading. Excluding autos, manufacturing rose 0.5%, indicating that the rest of the factory sector was stronger than the headline suggests. Other gains included machinery at +1.4%, primary metals at +1.6%, electrical equipment at +1.3%, and chemicals at +1.0%.
Mining output edged up 0.2%, while utilities and manufacturing provided the bulk of the overall gain. Capacity utilization came in at 76.9%, above the 76.5% expected, a measure of how much of the nation's industrial capacity is in use. The mixed composition of strong utilities and tech, weak autos, and modest mining shows an industrial sector that is expanding overall but with sharply uneven demand. The source report framed these trends as AI-related investment masking softer conditions elsewhere in the economy.
US industrial production rose 0.7% in September, beating the 0.4% consensus forecast. The prior month's reading was revised to +0.1% from 0.0%. The gain was led by utilities and semiconductors, while autos declined.
Utilities output rose 3.5%, with electric utilities up 3.7% month-over-month and 9.6% year-over-year, and the utility operating rate rose 2.3 points to 73.8%. The report said the year-over-year trend is consistent with data-center load, though weather could also have played a role in the monthly increase. Utilities output grew at a 14.8% annualized rate in the third quarter.
Total manufacturing rose 0.3% as expected. Excluding high-tech, factory output rose only 0.2% month-over-month and 0.7% year-over-year, while excluding autos manufacturing rose 0.5%. This shows the aggregate figure masks a wide gap between strong tech-related production and weaker non-tech categories.
Headline Beat Driven by Utilities
Manufacturing Split by High-Tech Strength
Autos Drag on the Factory Sector
Mining and Broader Capacity Utilization
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Motor vehicles and parts fell 3.0%, with vehicles down 5.4%. Assemblies fell to a 10.21 million annual rate from 10.61 million in August and 11.0 million in May. The auto decline was a major drag on the manufacturing headline.
Capacity utilization measures the proportion of industrial capacity in use, and it came in at 76.9% versus 76.5% expected. The utility operating rate rose 2.3 points to 73.8%. These figures indicate more of the industrial base was active in September than economists had anticipated.
Machinery rose 1.4%, primary metals 1.6%, electrical equipment 1.3%, and chemicals 1.0%. Semiconductor output rose 2.1% month-over-month and 19.9% year-over-year. Mining output increased 0.2%.
