---
title: "US factory output falls 0.3% two days after the Fed's first hike since 2023"
url: "https://etf.net/news/us-factory-output-falls-0-3-two-days-after-the-fed-s-first-hike-since-2023-2026-09-18"
published_at: "2026-09-18T14:15:23.125Z"
updated_at: "2026-09-18T14:15:23.125Z"
byline: "ETF.net Research"
---

# US factory output falls 0.3% two days after the Fed's first hike since 2023

The Federal Reserve said Friday, September 18, 2026 that August industrial production was unchanged, with manufacturing down 0.3%, two days after its first rate increase since 2023.

By ETF.net Research. Published Sep 18, 2026.

Shops spent. Factories did not. Manufacturing output fell **0.3%** in August after seven consecutive monthly increases, the Federal Reserve said Friday at 9:15 a.m. Eastern, two days after the Federal Open Market Committee raised the federal-funds target by 1/4 percentage point to 3.75% to 4%, its first increase since 2023. Total industrial production was unchanged at **103.1** (2017=100), **1.4%** above a year earlier and short of the 0.3% monthly increase economists had expected. The $30.5 billion industrial-sector fund XLI was little changed shortly after the cash open, up 0.1% at $169.18 as of 9:49 a.m. Eastern.

Durable manufacturing declined **0.5%**, the Fed said, with broad-based declines across categories; nondurables were unchanged. Factories used **75.7%** of capacity, down 0.3 percentage point and 2.5 percentage points below their 1972–2025 average. That is spare capacity, not a bottleneck. It is the industrial backdrop under a median year-end 2026 funds-rate projection of 4.1%.

The August factory report arrived after that vote. On Wednesday the Census Bureau said retail and food-services sales rose **1.2%** in August to $773.9 billion, above the 0.8% gain economists had forecast, after a revised 0.5% decline in July. On Tuesday the New York Fed's Empire State general business-conditions index fell 13 points but stayed positive at 7.6.

XLI was already down sharply over the past month.

Chart: XLI dropped **7.4%** over the past month; the S&P 500 fell 1.2%

Source: etf.net, https://etf.net/news/us-factory-output-falls-0-3-two-days-after-the-fed-s-first-hike-since-2023-2026-09-18. Please cite the page URL.