- Prior was +0.7%
- Capacity utilization 76.3% vs 76.2% exp
- Prior utilization 76.2% (revised to 76.3%)
- Manufacturing output +0.2% vs +0.1% exp
This is slightly ahead of expectations but won't be a market mover.
U.S. industrial production rose 0.2% in February, following a strong 0.7% gain in January that was the largest monthly increase in nearly a year. Total output stood at 102.6% of its 2017 average, up 1.4% from a year earlier. Capacity utilization held steady at 76.3%, remaining 3.1 percentage points below its long-run average — consistent with continued slack in the industrial sector.
Manufacturing output edged up 0.2% in February after a revised 0.8% advance in January. Within durables, results were mixed: motor vehicles and parts posted the strongest gain, while machinery recorded the largest decline. Nondurable manufacturing also rose 0.2%, with strength in chemicals, plastics and rubber products, and paper offsetting weakness in petroleum and coal products and food. The diffusion index for February came in at 65.1% on a one-month basis, suggesting gains were fairly broad-based.
Mining output was a bright spot, rising 0.8% for the second consecutive month of solid gains after declining through much of Q4 2025. Utilities output fell 0.6%, driven by a 4.7% drop in natural gas utility output, while electric utilities were flat.
Looking at the broader trajectory, total IP grew at only a 0.7% annualized rate in Q4 2025, and manufacturing output actually declined at a 2.6% annualized pace that quarter. The January–February rebound has partially reversed that weakness, though business equipment output — which surged 6.4% year-over-year — has been a notable source of strength, led by transit equipment and information processing.
