USA Industrial Production Below Expectations but GDP Relevant Details Stronger on Net

Economics Research 18 September 2026 | 10:16AM EDT

USA: Industrial Production Below Expectations but GDP-Relevant Details Stronger on Net; Boosting Q3 GDP Tracking Estimate to 3.3%

BOTTOM LINE: Industrial production was unchanged and manufacturing production Jan Hatzius | declined by 0.3% in August, both below expectations. Softness in manufacturing Goldman Sachs & Co. LLC

production was broad-based across industries, with the largest declines in furniture David Mericle | products, aerospace equipment, and motor vehicles. The utilities component, which Goldman Sachs & Co. LLC is used to estimate the consumption component of GDP, was significantly stronger than our tracking assumption. On net, we boosted our Q3 GDP tracking estimate by Alec Phillips | Goldman Sachs & Co. LLC 0.1pp to +3.3% (quarter-over-quarter annualized). Ronnie Walker | US MAP: Goldman Sachs & Co. LLC Industrial production -2 (2, -1) Pierfrancesco Mei | KEY NUMBERS: Goldman Sachs & Co. LLC

Jessica Rindels Industrial production flat for August vs. GS +0.4%, median forecast +0.3%, prior | +0.2% Goldman Sachs & Co. LLC

Abhay Duggirala Manufacturing production -0.3% for August vs. GS +0.4%, median forecast +0.3%, | prior +0.2% Goldman Sachs & Co. LLC

Capacity utilization 76.3% for August vs. GS 76.4%, median forecast 76.4%, prior 76.3%

1. Industrial production was unchanged and manufacturing production declined by 0.3% in August, both below expectations. Softness in manufacturing production was broad-based across industries, with the largest declines in furniture products (-1.4%), aerospace equipment (-1.2%), and motor vehicles (-1.2%). Production in high-technology industries—which include semiconductors, computers, communications equipment—was unchanged in August but increased 12.5% over the last year. The capex-sensitive business equipment category declined 0.5% in August but increased 7.1% over the last year. The utilities component increased sharply by 1.8% month-over-month.

2. Capacity utilization was unchanged at 76.3%. We recently noted that most manufacturing industries are operating well below their maximum potential output, and only a few are nearing their peak rates of capacity utilization reached in recent business cycles—notably, electrical equipment and machinery manufacturers, likely reflecting AI-related demand.

3. The utilities component of the industrial production report was significantly stronger than our previous GDP tracking assumptions, while the business equipment

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component was softer. On net, we boosted our Q3 GDP tracking estimate by 0.1pp to +3.3% (quarter-over-quarter annualized).