Industrial production in the United States fell by 0.2% month-on-month in May 2025, according to data released by the Federal Reserve on Tuesday (June 17), missing market expectations of a 0.1% expansion. The decline follows a 0.1% increase in April and reflects sluggishness in factory activity.
On a year-on-year basis, industrial output rose 0.6%, but again undershot the forecast of 1.1%, indicating a broader deceleration in industrial momentum.
Manufacturing output, however, offered a silver lining, edging up by 0.1% in May, slightly better than the expected 0.1% decline. On an annual basis, manufacturing production grew by 0.5%, compared to the 0.9% rise anticipated by economists.
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Meanwhile, capacity utilisation — a measure of how fully firms are using their resources — eased to 77.4% in May, down from 77.7% in April and also below the consensus estimate of 77.7%.
US retail sales, export prices disappoint in May
Retail sales in the US declined more than expected in May, falling 0.9% month-on-month against a forecast of -0.4%, signalling a possible cooling in consumer demand.
On a year-on-year basis, retail sales rose 3.3%, missing the estimated 4.9% growth. The data suggests that US households may be pulling back on discretionary spending amid elevated interest rates and economic uncertainty.
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Export prices also slipped by 0.9% month-on-month, falling well short of the expected 0.1% increase, while import prices remained flat against estimates of a 0.1% uptick. On an annual basis, export and import prices were in line with forecasts, at 1.7% and 0.2%, respectively.
