On February 18, according to a report from the US Federal Reserve (Fed), manufacturing output in January 2026 increased by 0.6%. This is the most spectacular increase since February 2025, far exceeding the forecast of 0.4% of experts. Compared to the same period last year, output at factories has broken through by 2.4%.
This recovery is of great significance because the manufacturing sector - accounting for 10.1% of the US economy - has been heavily hampered by President Donald Trump's tariff measures recently.
Businesses complain that this tax pushes costs up, causing the manufacturing industry to lose more than 80,000 jobs last year. However, Mr. Trump still defends his policy, considering it a necessary measure to revive the domestic industrial base.
However, the picture is not entirely gloomy as some segments, especially technology, are booming thanks to the huge wave of investment in artificial intelligence (AI). Optimistic economists expect that the boost from AI will soon spread to the rest of the manufacturing industry, combined with the momentum from upcoming tax cuts.
The growth momentum in January was widespread. The output of durable consumer goods increased by 0.8%, led by machinery, electronic equipment and motor vehicle components - a group of goods that just rebounded for the first time since August last year. The group of non-durable goods also increased by 0.4% thanks to the paper, chemical and plastic industries.
Notably, utility industry output jumped 2.1% due to record heat demand as polar cold snaps swept through the southern United States. In general, US industrial production total increased by 0.7% in January and 2.3% compared to the same period last year.
These positive signals are further strengthening confidence in a new recovery cycle. The occupancy rate of the entire industry - a measure of assessing the level of actual resource exploitation - has increased from 75.7% in December to 76.2%. The occupancy rate of the manufacturing sector alone also increased by 0.4 percentage points, reaching 75.6%.
Although these figures are still lower than the long-term average, in the context of trade policy incertitudes gradually subside, analysts believe that US corporations will soon strongly unlock long-delayed investment plans.
