U.S. Manufacturing Output Stalls in May, First Decline This Year

U.S. manufacturing production ground to a halt in May, marking the first stall this year after four consecutive months of growth, according to Federal Reserve data released June 15, 2026. Factory output was flat compared to April, defying the median economist estimate of a 0.3% increase in a Bloomberg survey. Total industrial production—including utilities and mining—rose a modest 0.1%. The slowdown comes as supply chain disruptions tied to the Iran war and rising production costs begin to weigh on factory activity. Manufacturing excluding motor vehicles and parts also showed no change in May. The report contrasts with recent surveys pointing to increased activity, driven by customer stockpiling amid the war, rising defense orders, and ongoing data center construction. However, a separate report released the prior week showed producer prices rose at the fastest annual pace since 2022, signaling that cost pressures are beginning to bite. The Fed data revealed a divergence between durable and nondurable goods: durable goods output continued to rise, while nondurable goods declined, pulled down by lower production in petroleum and coal products, plastics and rubber, and textiles. Industries tied to the data center boom—including computers, electronic products, electrical equipment, fabricated metals, machinery, and primary metals—posted gains, despite ongoing supply bottlenecks for components like memory chips and plastic resins. Defense and space equipment production climbed for a sixth straight month, reaching its highest level since December 2019, likely driven by efforts to replenish war munitions and potential export growth from recent trade deals. Mining output surged 1.3%, while utilities output fell 0.4%. Overall industrial capacity utilization stood at 76.2%.