An employee assembles industrial fans at a manufacturing facility in Lexington, Kentucky.
U.S. industrial production rose in January by the most in nearly a year, fueled by a broad increase in manufacturing and another healthy advance in utility output. The 0.7 percent increase in production at factories, mines, and utilities followed a downward revision for December, to a 0.2 percent gain, Federal Reserve data showed today.
Manufacturing output, which accounts for three-fourths of total industrial production, rose 0.6 percent—also the most since February 2025. The advance was broad and included strong gains in business equipment and consumer goods production.
The increase in factory production, which also reflected rebounds in output of both business and construction supplies, adds to other signs of a nascent recovery in manufacturing. With trade policy uncertainty starting to lift, companies may be taking advantage of favorable tax provisions and moving forward with capital spending plans.
By industry, production of computers and electronic products, machinery, and motor vehicles increased in January. Output of non-durable goods also rose.
A separate report out today showed that orders for business equipment increased in December by more than projected, suggesting solid capital investment at the end of last year that will help underpin production. Among durable goods categories, orders climbed for communications equipment, computers, metals, electrical equipment, and machinery. Bookings for motor vehicles rose by the most since June.
Other reports have indicated that manufacturing is poised to pick up this year. Government data showed manufacturing employment increased in January for the first time since late 2024, while a report from the Institute for Supply Management (ISM) indicated the strongest expansion in factory activity since 2022.
Output at utilities increased 2.1 percent, while mining and energy extraction fell, the Fed's report showed. A series of Arctic air masses that swept across much of the United States brought bitterly cold temperatures into the Deep South. At the same time, temperatures were much above average in the western third of the country.
Capacity utilization at factories, a measure of potential output being used, rose to 75.6 percent, the highest since September. The overall industrial utilization rate also picked up.
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