U.S. Industrial Output Rose 0.7%, but the Factory Gain Was Smaller and Auto Production Fell

The sectors moved at different speeds

U.S. industrial production increased 0.7% in September, according to preliminary Federal Reserve figures released October 16. Manufacturing rose 0.3%, mining increased 0.2%, and utilities jumped 3.5%. Motor vehicles and parts went the other way, falling 3.0%.

The comparison matters because industrial production includes utilities and mining as well as manufacturing. A 0.7% increase in the combined index is not a finding that factories increased output by 0.7%, and it says nothing by itself about the number of manufacturing jobs added.

Growth alongside unused capacity

Total industrial production stood 2.2% above its September 2025 level. Overall capacity utilization reached 76.9%, still 2.5 percentage points below its long-run average. Manufacturing utilization was 75.9%, versus a 78.2% long-run average—a 2.3-point gap.

Those gaps describe output relative to estimated sustainable capacity. They are not unemployment rates, vacancy rates for factory buildings or percentages of machines literally switched off. A sector can expand production while remaining below its historical utilization rate.

How to interpret the release

The Fed’s methodology describes industrial production as a real-output index with value-added weights. That means the three headline sector changes should not be simply averaged: the industries have different economic weights. The published rates also cannot be used alone to assign an exact share of September’s overall gain to utilities.

The index’s base-year level has a different meaning from capacity use. An output index above 100 means production exceeds the base-year benchmark, not that industry is running beyond full capacity. Monthly percentage changes, annual comparisons and utilization percentages should remain separate when the figures appear in political claims or business forecasts.

September is marked preliminary, and earlier months can be revised. This comparison uses the October 16 release and the Fed’s methodology; it establishes uneven output growth, not a causal verdict about any one tariff, interest-rate decision or administration policy.