• Federal Reserve revises August industrial production to -0.1% from preliminary +0.1% reading
  • Manufacturing output shows pockets of strength with 0.2% growth, driven by 2.6% surge in auto production
  • Mixed signals continue as mining gains 0.9% while utilities output falls 2.0%

Revised Data Shows Contraction

U.S. industrial production contracted slightly in August, according to revised data released by the Federal Reserve on Thursday. The central bank now reports output fell 0.1% for the month, a reversal from the preliminary reading of 0.1% growth that had suggested modest expansion.

The downward revision reflects continued weakness in the industrial sector rather than the previously indicated recovery. The final figure marks a reversal from July's 0.4% drop but falls short of the marginal growth initially reported. According to people familiar with the matter, the revision stemmed from later-arriving data that showed broader softness across multiple industrial segments.

Manufacturing Shows Mixed Performance

Within the broader industrial sector, manufacturing output rose 0.2% in August, buoyed largely by a 2.6% surge in motor vehicle and parts production. However, this strength was concentrated in the automotive sector, with non-automotive manufacturing remaining essentially flat or slightly negative.

"The automotive sector is carrying much of the weight right now," said one analyst who requested anonymity to discuss the preliminary data. "When you strip out vehicles, the picture looks much less robust."

The divergence between manufacturing indicators continues to puzzle analysts. While the S&P Global Manufacturing PMI for August reached a three-year high of 53.0, the ISM Manufacturing PMI remained in contraction territory below 50. This suggests some industry segments are recovering while others continue to struggle.

Sector Performance and Outlook

Other components showed varied performance. Mining output increased by 0.9%, providing some offset to the broader weakness, while utilities output fell 2.0%, largely due to declines in electric utility generation.

Efforts to sustain industrial recovery have hit snags amid ongoing cost pressures and supply chain challenges exacerbated by tariff increases earlier this year. Without stronger order growth, manufacturers may struggle to maintain production levels through the fourth quarter.

A Fed spokesperson declined to comment on the specific reasons for the revision when reached Thursday afternoon. The central bank's next industrial production report, covering September data, is scheduled for release in mid-October.

Correction: An earlier version of this article misstated the percentage decline in utilities output. It fell 2.0%, not 2.5%.