U.S. Industrial Production Rises 0.3% in June, Factories Operate Below Capacity

Industrial production in the United States rose 0.3% in June compared to May, according to the Federal Reserve.

This moderate increase beat market expectations, which predicted no growth. While some parts of the industrial sector gained ground, others stayed flat or declined, keeping overall output below long-term potential.

Production is now 0.7% higher than June last year. The largest boost came from electric utilities, which expanded by 2.8% as warmer weather likely increased cooling demand.

But manufacturing—the biggest part of industrial output—only rose 0.1%, and mining slipped by 0.3%.

Capacity utilization, which shows how much of the country’s industrial power is in use, increased slightly to 77.6%.

That’s still below the historical average of 79.6%, meaning many plants and factories are operating below full strength. Manufacturing ran at 76.9% capacity, mining at 90.6%, and utilities at 70.1%.

The numbers inside manufacturing tell a mixed story. Durable goods production stayed flat. Car manufacturing dropped sharply by 2.6%, and electrical equipment fell 2.5%.

U.S. Industrial Production Rises 0.3% in June, Factories Operate Below Capacity

On the other hand, primary metals production rose 3.1%, and the aerospace category gained 1.6%. These increases helped balance the losses.

Nondurable goods showed more life. Petroleum and coal products jumped 2.9%, though other areas were weaker. Business equipment production ticked up just 0.1%, and construction supplies rose 0.3%.

These small gains suggest steady, but not strong, business demand. Energy materials, which support factories and logistics, rose 0.9%.

The US industrial sector is not shrinking, but it is far from booming. Factories are not running at full tilt, but the system is stable. There’s room for stronger activity if demand improves. So far, the key takeaway is simple: the engine is running, but nowhere near top speed.

These figures come directly from the Federal Reserve’s July 16, 2025 report on industrial production and capacity.