02:59 PM EDT, 09/16/2025 (MT Newswires) -- US industrial production logged a surprise increase in August as manufacturing output rebounded amid strong growth in motor vehicles and parts, data from the Federal Reserve showed Tuesday.

Industrial output rose 0.1% last month, following a downwardly revised 0.4% decrease in July. The consensus was for a decline of 0.1% in a survey compiled by Bloomberg.

Manufacturing output grew 0.2% in August after a 0.1% contraction the prior month. The durable manufacturing index advanced 0.2%, following a 0.3% gain. Within durables, the motor vehicles and parts component rose 2.6%, while nonmetallic minerals products increased 1.2%.

"Industrial production performed better than expected in August, and (the) key to its resilience so far has been the (artificial intelligence) tailwinds to information processing equipment and a comeback in aerospace," Oxford Economics Lead US Economist Bernard Yaros said in remarks e-mailed to MT Newswires.

The nondurable manufacturing index rose 0.3% in August, following a 0.5% drop the previous month. Textile and product mills saw a 2.5% gain, while petroleum and coal products increased 1.6%, Fed data showed.

Mining output rose 0.9% last month after a 1.5% drop in July. Utilities production decreased 2% amid a 2.3% decline in the electric component, according to the report.

"Next year, industrial production is poised for a lasting rebound thanks to accommodative fiscal policy, further interest-rate relief, and reduced trade policy uncertainty, not to mention a weaker dollar lending a modicum of support," Yaros said.

The central bank's Federal Open Market Committee kicked off its two-day monetary policy meeting Tuesday. Markets widely expect the FOMC to lower its benchmark lending rate by 25 basis points Wednesday, according to the CME FedWatch tool. Many analysts expect the move to mark the start of an easing cycle amid worries about a softening labor market.

Earlier this month, two surveys painted a mixed picture of the US manufacturing sector for August, with Institute for Supply Management data showing continued contraction and an S&P Global ( SPGI ) report pointing to a rebound to expansion.

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