Implications: Industrial production came in much higher than expected in September as broad-based gains were coupled with a surge in utility output to push up activity for a sixth consecutive month. Looking at the details, the volatile and tariff-exposed auto sector fell 3.0% in September.  However, manufacturing excluding autos (which we think of as a “core” version of industrial production) rose 0.6%.  As a result, overall manufacturing was still up a solid 0.3%.  Notably, manufacturing ex-autos has been on a consistent upward trend since the start of 2025, a sharp reversal from the downward trend from 2018-2025. Production in high-tech equipment, which has been a consistent source of strength recently due to data center construction and the reshoring of semiconductor production, jumped 1.5% in September. Activity in this sector is up 17.6% in the past year, the fastest of any major category. The manufacturing of business equipment remained unchanged in September but is up 6.8% in the past year, easily outpacing the 1.1% gain in overall manufacturing and signaling a broader reindustrialization.  Looking outside the manufacturing sector, mining activity eked out a gain of 0.2% in September.  The increase was driven by gains in oil and gas extraction which more than offset declines in drilling activity and the extraction of other minerals.  Finally, utilities output posted a gain of 3.5% in September. This series has been on an upward trend since 2023, following nearly twenty years of stagnation, as power hungry data centers have boosted demand for US power generation. On the inflation front, import prices rose 1.1% in September and export prices rose 2.2%.  In the past year, import prices are up 8.1%, while export prices have risen 11.6%.

Click here for a PDF version