Industrial production declined 2.4 percent on the month in August, down 2.8 percent from July's unrevised reading. All sectors shows declines with consumer and intermediate goods both falling 1.2 percent, capital goods falling 2.2 percent and energy falling 0.6 percent.

Year-over-year, output declined 2.7 percent, down 3.6 percent from July's record high of 0.9 percent. This was largely due to a decrease in consumer goods, and energy both of which declined 2.3 percent and 8.6 percent, respectively. This offsets the growth in capital goods and intermediate goods which grew 0.7 percent and 0.2 percent, respectively.

In sum, goods production fell sharply in August compared to July with year over year production falling from the strongest in 2025 in July to the weakest this year. On average, output decreased 0.6 percent over the last three months.

Industrial production measures the physical output of the nation's factories, mines and utilities. Construction is excluded. Approximately 4,100 companies provide data on more than 8,000 monthly flows of 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 will not 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.