February Industrial Production Increases More Than Projected Amid Auto Boost

12:47 PM EDT, 03/18/2025 (MT Newswires) -- Industrial production in the US rose more than expected last month as the motor vehicle component helped drive gains in durable manufacturing output, data from the Federal Reserve showed Tuesday.

Industrial output grew 0.7% in February following a downwardly revised 0.3% increase the month prior. The consensus was for a 0.2% print in a survey compiled by Bloomberg. Annually, industrial production advanced 1.4% last month.

Manufacturing output rose 0.9% after an upwardly revised 0.1% increase the month before. The index for durable manufacturing gained 1.6% after remaining unchanged in January, while the nondurable component increased 0.2%, the data showed.

"While the February numbers will require an upgrade to the near-term forecast, the drivers of last month's upside surprise are unlikely to sustain the same strength into the coming months," Oxford Economics Lead US Economist Bernard Yaros said in remarks e-mailed to MT Newswires.

Within durables, motor vehicle and parts rebounded to positive territory with an 8.5% jump last month, while machinery decelerated to 0.1% from 0.2% in January. Aerospace and miscellaneous transportation equipment production growth slowed down on a sequential basis to 2.1% from 5.6%.

"Transportation equipment has been a source of volatility and boosted overall factory output in February," Yaros said. "Auto production faces several challenges, not to mention an unfolding trade war, and aerospace output is now above its level prior to last year's Boeing ( BA ) strike."

Equity markets have been volatile in recent weeks amid US President Donald Trump's tariff plans. The Trump administration has proposed or implemented duties on its key trading partners, including China, Canada and the European Union, which have all announced retaliatory tariffs.

Utilities output dropped 2.5% in February as electric and natural gas fell into negative territories. Mining output rose 2.8% following a 3.2% decline in January, according to Fed data.

"The industrial sector won't regain its stride until 2026 when the interest-rate loosening cycle will resume in full and North American tariffs will be largely removed," Yaros said.

Price: 160.20, Change: -1.65, Percent Change: -1.02

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.