US manufacturing output stagnates in July due to tariffs

U.S. manufacturing output remained unchanged in July, according to the Federal Reserve (Fed). This result reflects a stagnation in factory activity amid higher costs stemming from import tariffs.

This figure follows an upwardly revised 0.3% growth in June. Analysts surveyed by Reuters had anticipated a slight decline of 0.1%, so the result was better than expected. Compared to the previous year, production grew 1.4%.

The automotive industry was once again affected by low demand and temporary shutdowns: vehicle and auto parts manufacturing fell 0.3% in July, after declining 2.5% in June. Excluding this sector, overall production fell 0.1%.

Economists warn that the tariffs imposed by President Donald Trump—50% on steel and aluminum, and 25% on vehicles and auto parts—have raised costs and prolonged technical shutdowns.

Other sectors performed unevenly. Production of electrical equipment, household appliances, aerospace, and furniture increased, while primary metals and machinery manufacturing declined.

Overall, durable goods production rose 0.3%, but non-durable goods production fell 0.4%. Mining production fell 0.4%, and utilities production declined 0.2%.

Industrial capacity utilization fell from 77.7% to 77.5%, 2.1 points below its historical average. In manufacturing, the indicator fell to 76.8%.

Regarding inventories, companies reported a 0.2% increase in June, driven by the accumulation of vehicles, in line with expectations.

With these results, total U.S. industrial production fell 0.1% in July, although it grew 1.4% year-over-year.