WASHINGTON, Dec 3 (Reuters) – U.S. factory production was unchanged in September as manufacturing remained constrained by tariffs on imports.
The flat reading in manufacturing output reported by the Federal Reserve on Wednesday followed an unrevised 0.1% gain in August. Economists polled by Reuters had forecast production for the sector, which accounts for 10.1% of the economy, ticking up 0.1%. Production at factories increased 1.5% on a year-over-year basis in September.
Manufacturing output grew at a 1.3% annualized rate in the third quarter, slowing from the April-June quarter’s 2.4% pace.
The report was delayed by a record 43-day shutdown of the government. Manufacturing has been hamstrung by President Donald Trump’s sweeping tariffs, but a surge in spending on artificial intelligence has propped up other industries.
Trump has defended the duties as necessary to revive a long-declining U.S. industrial base, though economists argue that effort cannot be accomplished in a short period of time, citing high production and labor costs as among the challenges.
A survey from the Institute for Supply Management on Monday showed its manufacturing PMI contracted for a ninth straight month in November, with tariffs continuing to be cited as a constraint across industries.
Motor vehicle and parts production decreased 2.2% in September after rebounding 3.0% in August. Durable manufacturing output edged up 0.1%. Nondurable manufacturing production dipped 0.1%. Mining output was unchanged after rising 0.4% in August.
Utilities production rebounded 1.1%. That followed a 3.0% decline in August. Overall industrial production ticked up 0.1% after falling 0.3% in August. Industrial output rose 1.6% on a year-over-year basis. It grew at a 1.1% rate in the third quarter.
Capacity utilization for the industrial sector, a measure of how fully firms are using their resources, was unchanged at 75.9% in September. It is 3.6 percentage points below its 1972–2024 average. The operating rate for the manufacturing sector slipped to 75.5% from 75.6% in August. It is 2.7 percentage points below its long-run average.
(Reporting by Lucia Mutikani, Editing by Nick Zieminski)
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