After nearly a year of malaise, the manufacturing industry showed signs of life last month.
According to statistics reported by the Federal Reserve this week, U.S. factory production rose by 0.6% in January, the largest gain since February 2025, after being unchanged in December, the Federal Reserve said on Wednesday.
Economists polled by Reuters had forecast production for the sector, which accounts for 10.1% of the economy, would rise 0.4%. Output in December was previously reported to have risen 0.2%, Reuters reported.
Production at factories advanced 2.4% on a year-over-year basis in January, according to the report. Manufacturing has been hampered by President Donald Trump’s sweeping tariffs, which business leaders say have raised costs for factories and consumers.
According to Reuters, economists are optimistic a boost from AI will broaden to the rest of manufacturing, which they also expect to get a lift from tax cuts.
The increase in factory output last month occurred across the board. Durable goods manufacturing output rose 0.8%, with strong gains in nonmetallic mineral products, machinery, computer and electronic products, miscellaneous durable goods, as well as motor vehicles and parts, which rose for the first time since last August.
Mining output fell 0.2% after decreasing 0.9% in the prior month, according to Reuters, which also reported that utilities production increased 2.1% as the tailwind from freezing weather persisted. That reading followed a 3.0% jump in December. Overall industrial production advanced 0.7% after gaining 0.2% in December. Industrial increased 2.3% on a year-over-year basis in January.
