Industrial Production Flat In August, Manufacturing Unexpectedly Drops

Manufacturing was down 0.3 percent vs Econoday expectation of plus 0.2 percent.

Please consider the Fed’s Industrial Production and Capacity Utilization report for August 2026.

Industrial production (IP) was unchanged in August after increasing 0.2 percent in July. Manufacturing output decreased 0.3 percent in August. The index for mining ticked up 0.1 percent, and the index for utilities increased 1.8 percent. At 103.1 percent of its 2017 average, total IP in August was 1.4 percent above its year-earlier level. Capacity utilization was unchanged at 76.3 percent, a rate that is 3.1 percentage points below its long-run (1972–2025) average.

Month-Over-Month Industrial Production

• Production: +0.0 percent

• Manufacturing: -0.3 percent

• Motor Vehicles and Parts: -1.2 percent

• Consumer Durable Goods: -0.5 percent

• Utilities: +1.8 percent

Industrial Production Year-Over-Year

Industrial production is up 1.4 percent from a year ago. Manufacturing is up 1.0 percent.

Utilities, Motor Vehicles, Consumer Durable Goods

I stripped out some of the more volatile components to better show the overall trends.

The range in this chart is roughly -13 to +9.The overall and manufacturing scale is roughly +- 2.

Aircraft is so volatile I don’t chart it. Numbers range from -30 to +20.

Note the sustained weakness in consumer durable goods while utilities are generally positive.

Industrial Production Detail

The index details highlight manufacturing weakness and Utilities strength.

Manufacturing peaked right at the onset of the Great Recession at 106.6. Its highest rebound just prior to the Covid recession was 102.0.

The Manufacturing index has been rising lately but sits at an anemic 99.1 now, down 7.0 percent in the past 19 years.

I added consumer durable goods to the chart this month. Consumer durable goods are tracking housing starts, which makes sense.

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