US manufacturing output dips in March

Manufacturing output dipped 0.1% last month after an upwardly revised 0.4% increase in February

Published Thu, Apr 16, 2026 · 10:11 PM

[WASHINGTON] US factory production unexpectedly fell in March after two straight months of solid gains, weighed down by decreases in the output of motor vehicles and a range of other goods.

Manufacturing output dipped 0.1 per cent last month after an upwardly revised 0.4 per cent increase in February, the Federal Reserve said on Thursday (Apr 16). Economists polled by Reuters had forecast production at factories would gain 0.1 per cent after a previously reported 0.2 per cent rise in February.

Production at factories advanced 0.5 per cent on a year-over-year basis in March. It grew at a 3.0 per cent annualised rate in the first quarter, rebounding from the fourth quarter’s 3.2 per cent pace of decline.

Manufacturing, which accounts for 10.1 per cent of the economy, showed signs of recovery after being hammered by President Donald Trump’s import tariffs. But the US-Israeli war with Iran has sent oil prices surging by more than 35 per cent, which could stifle the recovery.

The Fed’s “Beige Book” report noted that the conflict “was cited as a major source of uncertainty that complicated decision-making around hiring, pricing and capital investment, with many firms adopting a wait-and-see posture.”

Motor vehicle production dropped 3.7 per cent after increasing 2.6 per cent in February. There were decreases in the output of primary metals, machinery as well as furniture and related products.

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The production of durable goods fell 0.2 per cent. Output of nondurable manufactured goods edged down 0.1 per cent, though production of petroleum and coal as well as plastics and rubber products rose.

Mining output declined 1.2 per cent after rebounding 2.1 per cent in February. Energy production fell 1.6 per cent, with oil and gas well drilling decreasing 2.4 per cent.

The Beige Book noted that though activity in the energy sector rose slightly in early April, “many producers remained cautious about increasing drilling due to uncertainty about the persistence of higher prices.”

SEE ALSO

Utilities production dropped 2.3 per cent as demand for heating declined. Utilities production increased 1.8 per cent in February. Overall industrial production dropped 0.5 per cent after an upwardly revised 0.7 per cent increase in February. Industrial output was previously reported to have gained 0.2 per cent.

It rose 0.7 per cent on a year-over-year basis in March and grew at a 2.4 per cent rate in the first quarter. Capacity utilisation for the industrial sector, a measure of how fully firms are using their resources, eased to 75.7 per cent from 76.1 per cent in February.

It is 3.7 percentage points below its 1972–2025 average. The operating rate for the manufacturing sector fell 0.2 percentage point to 75.3 per cent. It is 2.9 percentage points below its long-run average. REUTERS

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USD/JPY dips on weak US manufacturing data, stronger Japanese yields

USD/JPY trades lower around 156.30 on Monday at the time of writing, down 0.40% on the day, after giving back part of its earlier gains. The pair reflects a reversal in sentiment toward the US Dollar (USD), which had been supported earlier by safe-haven flows amid heightened geopolitical tensions in Latin America.

On the US side, the US Dollar (USD) initially drew support from market nervousness following the announcement of the capture of Venezuelan President Nicolas Maduro by the United States (US), an event that has revived geopolitical concerns and boosted demand for safe-haven assets. However, this support proved short-lived. The release of the Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) shows a decline to 47.9 in December, from 48.2 in November and below market expectations. This third consecutive drop confirms a deeper contraction in US manufacturing activity, driven by declines in production and inventories, even as price pressures remain elevated.

These figures reinforce the idea of a gradual slowdown in the US economy and add nuance to growth prospects. Markets therefore continue to price in two additional interest rate cuts by the Federal Reserve (Fed) in 2026. Investors also remain attentive to the possibility that US President Donald Trump could nominate a new Fed Chair when Jerome Powell’s term ends in May, a scenario seen as potentially favoring a more accommodative monetary policy stance. Minutes from the latest Federal Open Market Committee (FOMC) meeting further show that several officials consider it appropriate to pause further rate cuts as long as inflation continues to ease gradually.

Recent comments from Minneapolis Fed President Neel Kashkari, who said inflation remains too high but described the labor market as being in a low-hiring, low-firing environment, were not enough to stem selling pressure on the US Dollar.

Against this backdrop, the weaker US Dollar supports the Japanese Yen (JPY). The Japanese currency fully benefits from the risk-off environment, while also drawing support from rising domestic yields. Japanese government Bond yields have climbed to their highest levels since 1999, strengthening the appeal of the Japanese Yen (JPY). The narrowing yield differential between the United States and Japan also favors the Japanese currency.

In the near term, USD/JPY remains sensitive to shifts in overall market sentiment, upcoming US macroeconomic data and the trajectory of Bond yields, in an environment dominated by geopolitical uncertainty and monetary policy expectations.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Canadian Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD0.04%-0.57%-0.36%0.22%-0.28%-0.33%0.04%EUR-0.04%-0.61%-0.35%0.18%-0.32%-0.36%0.00%GBP0.57%0.61%0.23%0.80%0.29%0.25%0.62%JPY0.36%0.35%-0.23%0.57%0.06%0.02%0.39%CAD-0.22%-0.18%-0.80%-0.57%-0.51%-0.55%-0.18%AUD0.28%0.32%-0.29%-0.06%0.51%-0.05%0.33%NZD0.33%0.36%-0.25%-0.02%0.55%0.05%0.37%CHF-0.04%-0.01%-0.62%-0.39%0.18%-0.33%-0.37%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

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