Implications: Industrial production posted a modest gain in February, rising for the fourth consecutive month to hit a new post-COVID high. More broadly, industrial production is up 2.5% since the Trump Administration took office in January 2025, despite huge shifts in trade policy and tariff uncertainty.  Meanwhile, the manufacturing sector is up 2.6% over that same period. While these numbers aren’t enough to get excited about yet, it’s clear that a new upward trend in activity is emerging. Digging into the details for February, manufacturing was the biggest source of strength, rising 0.2%. The volatile auto sector contributed to the gain, with activity jumping 1.6% in February.  Manufacturing ex-autos (which we think of as a “core” version of industrial production) also posted a gain of 0.1%. The typical bright spots in the “core” measure were present in today’s report as well.  Production in high-tech equipment, which has been a reliable tailwind recently due to investment in AI as well as the reshoring of semiconductor production, increased 0.7% in February.  High-tech manufacturing is up a strong 8.6% in the past year, the fastest 12-month growth rate of any category. However, the manufacturing of business equipment wasn’t far behind, up 6.3% in the past year, signaling reindustrialization in the US outside of just the high-tech industries mentioned above. The mining sector was also a tailwind in February, rising 0.8%. Gain in oil and gas production and the drilling of new wells more than offset a decline in the extraction of other metals and minerals.  Finally, utilities output (which is volatile and largely dependent on weather) declined 0.6% in February. In other manufacturing news this morning, the Empire State Index – a measure of factory sentiment in the New York region – declined to -0.2 in March from +7.1 in February. Finally, the NAHB index, a measure of homebuilding sentiment, increased to 38 in March.  Keep in mind readings below 50 signal a greater number of builders view conditions as poor versus good, now the 23rd consecutive month that has been the case.

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