A month ahead of the April 2 “Liberation Day” tariff announcement from President Donald Trump. Production at American factories was up.
According to the Federal Reserve, U.S. factory output rose 0.3%, an increase that follows a revised 1% gain that came in February, according to a report from Bloomberg, which reported the Federal Reserve said the gain was fueled by a surge in motor vehicle assemblies. Excluding autos, factory output also rose 0.3% in March.
Overall industrial production fell for the first time in four months. Output at utilities declined on warmer weather, while mining and energy extraction rose, Bloomberg reported.
Manufacturing output was up 5.1% in the first quarter – the most since late 2021 – as many customers boosted orders before the brunt of the tariffs hikes went into place.
Other manufacturing headwinds include higher costs for some materials as well as the general uncertainty tied to Trump’s uneven implementation of his trade policy that’s made navigating supply chains more challenging, Bloomberg reported.
The gain in March manufacturing reflected a second monthly increase in motor vehicle and parts output and a pickup in aerospace equipment production, according to the Fed.
By market group, production of business and military equipment as well as construction supplies climbed, while the output of consumer goods fell on energy.
The Fed’s report showed capacity utilization at factories, a measure of potential output being used, edged up to 77.3%. The overall industrial utilization rate fell to 77.8%. Earlier government figures showed retail sales strengthened at the end of the first quarter. Sales increased 1.4%, the largest advance since early 2023 and powered by a surge in motor vehicle purchases as consumers front-loaded purchases ahead of tariffs.
