U.S. Industrial Output Outpaces Forecasts in January

(MENAFN) US industrial production accelerated sharply in January, outpacing analyst expectations by nearly double, as manufacturing activity rebounded from a sluggish end to 2025, the Federal Reserve reported Wednesday.

Output climbed 0.7% month-on-month — well ahead of the 0.4% gain markets had anticipated — and rose 2.3% compared with the same period a year earlier. The January reading followed a downwardly revised 0.2% uptick in December, signaling a meaningful pickup in momentum at the start of the new year.

Manufacturing production, a core pillar of the broader industrial gauge, posted a 0.6% monthly advance after flatlining in December. Durable goods manufacturing led the charge, expanding 0.8% on the strength of near-universal gains across its component industries. The Fed highlighted in an official statement that "Durable manufacturing output increased 0.8%, with gains in nearly all component industries, including increases of at least 1% in the production of nonmetallic mineral products, machinery, computer and electronic products, miscellaneous durable goods, and motor vehicles and parts, which increased for the first time since August 2025."

On the nondurable side, the central bank noted output rose 0.4%, though performance was uneven. Strength in paper, printing and support, chemicals, and plastics and rubber products was enough to outweigh softness elsewhere in the segment.

Capacity utilization edged up 0.5 percentage points to 76.2%, falling just short of the 76.6% consensus forecast. December's utilization rate was revised downward to 75.7%, further underlining the relative strength of January's recovery.

The data arrives as policymakers and investors closely scrutinize the industrial sector's trajectory amid broader uncertainty over the pace of US economic growth in 2026.

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