Industrial production recovered in February, rising 0.7 percent from the previous month's revised decline of 0.5 percent and putting an end to five consecutive months of contraction. Manufacturing provided the impetus, gaining 1.4 percent from a revised 0.5 percent decline in January, the most robust gain since May, 2023.

The heavily weighted other manufacturing sector rose 1.2 percent in February, the biggest gain since August of last year. Output of machinery and equipment rose 3.1 percent on the month, while the production transport equipment rose 3.2 percent, extending the prior month's gain of 1.1 percent and starting off the year on a strong note.

Within the sector, the automobiles, trucks and trailers rose 1.8 percent in February, slowing from January's 7.2 percent increase. It remains to be seen if this trend will continue to light of the sweeping tariffs announced by the US and possible retaliatory measures by the European Union.

Despite the uptick in the monthly data, a more somber picture emerges when looking at the annual results, with overall output down 0.4 percent from February of last year. January's initial result of a 1.6 percent contraction was revised to a 1.2 percent drop. Manufacturing contracted for the tenth consecutive month with a 1.2 percent decline.

The industrial sector continues to remain stressed as energy-intensive industries continue to be plagued by higher production costs.

Industrial production measures the physical output of the nation's factories, mines and utilities. Manufacturing is seen as the best guide to underlying developments as some sectors can be very volatile and cause misleadingly large short-term swings in total industrial production.

Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios. Like the PPI and the orders data, construction is excluded from the data. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.