Industrial production expanded in June

July 16, 2025

June industrial production (IP) rose a better-than-expected 0.3%, beating the market consensus of 0.1%. May industrial production was revised higher to unchanged from the previously reported drop of 0.2%.

Manufacturing output, which accounts for 75% of overall industrial activity, rose a more muted 0.1% due to tariff-related effects. Durable goods output was flat while nondurable goods production rose 0.3%. The production of motor vehicles and parts declined 2.6% from May and 2.4% from a year ago. Automakers backed off over concerns of softer demand for their products in the second half of 2025, due to higher prices. Excluding motor vehicles and parts, manufacturing output would have risen 0.3% and overall IP by 0.5%, both 0.2% higher than the actual numbers, indicating the importance of the auto sector as an economic barometer.

Business equipment output posted a soft 0.1% rise after jumping 0.8% in the prior month. Defense and space equipment output rose 1%, which was offset by a 0.3% decline in information processing equipment output.

Machinery output was one area of strength, rising 0.8% after two consecutive months of declines. A 2.8% rise in utility output contributed to the strength in June industrial output, thanks to a 3.5% jump in electricity usage.

Mining output fell 0.3% as oil and gas well drilling declined 0.6%. Crude oil prices increased in June but the price of $65 a barrel remains near breakeven level, not high enough to justify the cost for new wells.