American factories increased production of machinery, metals, electrical equipment and semiconductors in September, data from the Federal Reserve showed Friday.
Manufacturing output rose 0.3 percent last month, the Federal Reserve said, reversing a revised 0.2 percent decline in August. Production was 1.1 percent above its year-earlier level. August’s decline was smaller than the 0.3 percent drop initially reported.
The overall gain came despite a sharp pullback in automobile production. Manufacturing output excluding motor vehicles and parts increased 0.5 percent in September. Excluding both autos and selected high technology industries, output also rose 0.5 percent, indicating gains extended across other factory industries.
Machinery production increased 1.4 percent for the month and was 6.9 percent above a year earlier. Primary metals output rose 1.6 percent, while fabricated metal products increased 0.6 percent. Production of electrical equipment, appliances, and components climbed 1.3 percent and was up 5.4 percent over the year.
American chip manufacturing posted particularly strong growth. Semiconductor and related electronic component production rose 2.1 percent in September and was 19.9 percent above a year earlier. Output expanded at a 28.4 percent annual rate during the third quarter. The broader computer and electronic products industry produced 9.5 percent more than a year earlier.
Durable manufacturing output increased at a 3.8 percent annual rate in the third quarter and was 3.7 percent above a year earlier. Motor vehicles and parts were a drag, with production falling 3.0 percent in September, the third consecutive monthly decline. Total manufacturing grew at a 0.7 percent annual rate during the quarter, slowing from 5.6 percent in the second quarter.
Motor vehicle demand may be suffering from high gasoline prices. So far this year, new vehicle prices are up 0.4 percent and they are up 0.6 percent compared with September of last year, lagging the broader rise in prices across the economy, the Labor Department said in its report on consumer prices released Wednesday. In September, new vehicle prices climbed 0.2 percent. The Commerce Department’s retail sales report for September showed sales at auto and parts dealers rose 0.2 percent, suggesting a flat month after adjusting for prices. So far this year, sales at auto dealers are up 1.7 percent, suggesting sluggish real growth.
Separate reports released Thursday also pointed to expansion in the manufacturing sector.
The New York Fed’s Empire State Manufacturing Survey showed its general business conditions index jumping to 25.5 from 7.6 in September, the highest reading since December 2021. New orders rose markedly, with that index reaching 23.2, while the shipments index climbed to 13.1. Employment continued growing modestly, and manufacturers increased working hours. Positive readings indicate expansion.
The Philadelphia Fed’s manufacturing survey also showed continued expansion, although growth moderated. Its general activity index registered 20.9, down from September’s 37.8. New orders, shipments, and employment remained in positive territory.
The Philadelphia survey showed substantial investment plans for next year. More than 52 percent of responding manufacturers expected to increase total capital spending in 2027, while none anticipated a reduction. Half planned higher spending on noncomputer equipment.
Both regional surveys showed persistent price pressures. New York manufacturers reported elevated increases in input costs and selling prices. Philadelphia’s prices received index rose to its highest level since May 2025. Manufacturers in both surveys continued to expect business conditions to improve over the next six months.
