U.S. factories produced more machinery, metals, electrical equipment and computer chips in September, according to Federal Reserve data released Friday, even as automobile production kept falling.
Overall manufacturing output rose 0.3 percent last month, reversing a revised 0.2 percent drop in August. Production was 1.1 percent higher than a year earlier. The August decline turned out to be smaller than first reported, which had put it at 0.3 percent.
Strip out motor vehicles and parts, and the picture looks even stronger: manufacturing output excluding autos rose 0.5 percent in September. Output was also up 0.5 percent when both autos and certain high-tech industries are excluded, meaning the gains were spread across a wide range of factory sectors.
Machinery production climbed 1.4 percent in September and was up 6.9 percent from a year earlier. Primary metals output rose 1.6 percent, fabricated metal products rose 0.6 percent, and production of electrical equipment, appliances and components increased 1.3 percent, up 5.4 percent over the past year.
Semiconductor and related electronic component production was the standout, rising 2.1 percent in September and 19.9 percent over the past year. Output in that category grew at a 28.4 percent annual rate during the third quarter. The wider computer and electronic products industry turned out 9.5 percent more than it did a year earlier.
For the third quarter as a whole, durable manufacturing output grew at a 3.8 percent annual rate and was 3.7 percent above year-ago levels. Total manufacturing output grew at a 0.7 percent annual rate for the quarter, a sharp slowdown from the 5.6 percent pace in the second quarter.
Autos Remain a Weak Spot
Motor vehicle and parts production fell 3.0 percent in September, the third straight monthly decline. High gasoline prices may be weighing on demand. The Labor Department’s consumer price report, released Wednesday, showed new vehicle prices up just 0.4 percent so far this year and 0.6 percent compared with September of last year — both lagging overall inflation. New vehicle prices rose 0.2 percent in September alone.
The Commerce Department’s retail sales report for September showed sales at auto and parts dealers up 0.2 percent, which amounts to a flat month once price increases are factored in. Dealer sales are up 1.7 percent for the year so far, another sign of sluggish real growth in the auto market.
Regional Surveys Point to Further Expansion
Separate reports released Thursday from the Federal Reserve Banks of New York and Philadelphia pointed to continued growth in manufacturing in those regions.
The New York Fed’s Empire State Manufacturing Survey found its general business conditions index jumped to 25.5 in October from 7.6 in September — the highest reading since December 2021. New orders rose sharply, with that index hitting 23.2, while shipments climbed to 13.1. Employment grew modestly and manufacturers reported longer working hours.
In Pennsylvania, the Philadelphia Fed’s manufacturing survey also showed expansion, though growth slowed from the previous month. Its general activity index came in at 20.9, down from 37.8 in September. New orders, shipments and employment all stayed in positive territory.
The Philadelphia survey also pointed to stronger investment plans ahead: more than 52 percent of manufacturers surveyed said they expect to increase total capital spending in 2027, and none expected to cut spending. Half said they plan to spend more on equipment other than computers.
Both regional surveys flagged ongoing price pressures. New York manufacturers reported elevated increases in both input costs and the prices they charge. Philadelphia’s index tracking prices received by manufacturers rose to its highest level since May 2025. Manufacturers in both states continued to expect business conditions to improve over the next six months.
