Industrial production in the United States rose by 0.7% in February 2025, marking the third consecutive month of increases and surpassing market expectations of a 0.2% gain.
US industrial output rises more than expected
The increase followed a downwardly revised 0.3% rise in January and a 1.1% rise in December, signaling continued momentum in the industrial sector despite economic uncertainty.
Manufacturing output, which accounts for 78% of total industrial production, climbed 0.9%, driven by a notable 8.5% surge in the index for motor vehicles and parts, reflecting strong consumer demand and improved supply chain conditions. Excluding motor vehicles and parts, manufacturing output still posted a solid 0.4% gain, supported by steady growth in machinery, aerospace, and electronics production.
Mining output rebounds sharply
Meanwhile, mining output rebounded sharply, increasing 2.8% after a 3.2% decline in January. The recovery was largely attributed to higher crude oil and natural gas extraction, as well as a rise in coal production amid stronger energy demand.
On the other hand, the utilities sector saw a 2.5% decline in output, with electric utilities falling 1.2% and natural gas utilities plummeting 11.1%. The drop was primarily due to milder winter weather reducing the need for heating, weighing on overall energy consumption.
Capacity utilization edges up
Capacity utilization, a key measure of industrial efficiency, edged up to 78.2%, still 1.4 percentage points below its long-run (1972–2024) average. Despite the increase, the data suggests that while industrial activity remains robust, there is still room for expansion before reaching full capacity. Looking ahead, analysts will be watching for signs of sustained strength in manufacturing and mining, as well as potential risks from global supply chain disruptions and evolving Federal Reserve policy.
