September Industrial Production Rises More Than Forecast as Manufacturing Rebounds

12:46 PM EDT, 10/16/2026 (MT Newswires) -- US industrial production increased more than expected in September as manufacturing output rebounded despite weakness in the auto component, Federal Reserve data showed Friday. Industrial output grew 0.7% last month, following a revised 0.1% gain for August, according to the Fed. The consensus was for a smaller 0.4% increase in September in a survey compiled by Bloomberg. Manufacturing production rose 0.3% last month, rebounding from a 0.2% decline in August and matching Wall Street's views. Durable manufacturing output edged up 0.1% amid gains in primary metals, machinery, and electrical equipment, appliances, and components. Motor vehicles and parts dropped 3%, while the furniture category saw a 1.2% decline, according to Fed data. Details of the report show bifurcation within the industry, Oxford Economics said. "Many durable goods sectors are riding the coattails of the (artificial intelligence) buildout and higher defense spending, while others exposed to housing are struggling," Oxford Economics Deputy Chief US Economist Bernard Yaros said in a note e-mailed to MT Newswires. The firm doesn't expect the weakness in auto production to persist ahead, as high-income consumers continue to benefit from growing wealth, while "spillovers from the broader recovery in industrial demand supports demand for heavy duty trucks," Yaros wrote. Mining output increased 0.2% in September, while utilities grew 3.5%, with the electric component rising 3.7% and natural gas up 2.1%, Fed data showed. "The near-term forecast for industrial production will get revised higher on the back of this report, and we still maintain our view that next year will be even stronger," Yaros said. "Key drivers such as AI and defense will prove durable to the risks posed by higher long-term yields and the energy shock." Earlier this month, separate surveys by the Institute for Supply Management and S&P Global (SPGI) showed that the US manufacturing sector continued to expand in September amid robust demand and growth in employment, though inflationary pressures remained a key concern. Price: 427.19, Change: +2.38, Percent Change: +0.56