Chart is for illustrative purposes only. Past performance is not necessarily an indication of future results.
Last week’s economic news brought a report on industrial production, a measure of manufacturing activity in the U.S. economy. The metric grew 1.6% year over year in September, the largest acceleration in three years and an indication that cyclical sectors may be improving. While this growth is just below the historical average, the upward trend suggests improving momentum, which we view as encouraging.
On the heels of this report, we remind investors that industrial production typically slows as the country approaches a recession. Now, however, the indicator is on the rise and it appears broadening beyond artificial intelligence spend, which is positive for future economic growth.
We believe manufacturing could continue to improve in 2026 as lower interest rates and pro-growth provisions of the recent tax and spending legislation may help stimulate investment. This trend supports our outlook for gross domestic product at approximately 2%.
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MARK-851759-2025-12-10