In manufacturing, capacity utilization edged up to 76.0% from 75.9% in July. Gains were driven in particular by computer and electronic products, where utilization rose to 77.2% from 76.2%, and by electrical equipment, which increased to 86.6% from 85.5%. These advances mirror robust capital expenditure on AI-related infrastructure and computing capabilities. In contrast, utilization in nondurable manufacturing declined to 75.6% from 76.0%.

The figures are calculated on a year-over-year basis, comparing each month’s performance to the same month a year earlier. August’s improvement therefore suggests that industrial activity is gaining traction compared with last year’s levels, and that the manufacturing and broader industrial base may be stabilizing or gradually improving after a slower pace of expansion seen in July.

For market participants and policymakers, the pickup in industrial production adds another data point to the broader picture of U.S. economic momentum heading into the latter part of 2026. While the increase is not dramatic, the steady climb from July to August may support a cautiously more optimistic view on output and capacity utilization trends in the near term.

On a month-over-month basis, the latest reading reflects a deterioration in factory activity compared with July 2026, when output had inched higher. The comparison framework shows that while July’s 0.2% increase marked a mild expansion from June, August’s -0.3% print signals a pullback in momentum as production volumes slipped from the prior month.

The data highlight a fragile backdrop for U.S. manufacturers, where incremental gains can quickly give way to contraction. Investors and policymakers will now be watching upcoming releases to see whether August’s decline is a temporary setback or the start of a more persistent slowdown in the manufacturing sector.

The data, measured on a month-over-month basis, compare the change in August to July, and July’s performance to the month before it. While July’s 0.2% gain hinted at a mild pickup in activity, August’s stagnation suggests that underlying demand and production conditions remain fragile, with no net growth in overall industrial output heading into the autumn.

The stability in August suggests that U.S. industry is operating at a consistent pace, with no evident acceleration in demand pressures that might signal emerging capacity constraints. While the unchanged reading can point to a steady operating environment, it may also reflect a lack of fresh momentum in industrial activity.

The data, updated on 18 September 2026, will be closely monitored by investors and policymakers as a key gauge of slack in the industrial sector and a potential indicator of future inflationary pressures if utilization begins to trend higher from current levels.

At its August meeting, Mexico’s central bank (Banxico) left its benchmark rate unchanged at 6.50%, stating that inflation is expected to continue moderating gradually and to converge toward the 3% target in the fourth quarter of 2027. Banxico also noted that Mexico’s economy rebounded in the second quarter after contracting in the previous quarter, though it emphasized that downside risks to growth remain. The board reiterated that it expects to maintain the benchmark rate at its current level amid ongoing uncertainty related to geopolitical conflicts, global trade policies, and their potential impact on inflation.

The data are presented on a year-over-year basis, meaning the current reading compares the change in aggregate demand in the second quarter of 2026 with the second quarter of the previous year. Likewise, the earlier 5.0% figure for the first quarter of 2026 reflects growth versus the first quarter of the prior year. The acceleration suggests that demand-side momentum in Mexico improved as the year progressed, potentially supporting economic activity in the near term.

According to the latest data, updated on 18 September 2026, the current quarterly reading is measured against the previous quarter, while the earlier 0.30% figure reflected the change from the quarter before Q1 2026. The pickup in Q2 suggests a strengthening in overall demand conditions in the Mexican economy, reversing the subdued pace seen at the start of the year and signaling firmer momentum heading into the second half of 2026.

According to data updated on 18 September 2026, the Q2 2026 figure reflects a slightly slower pace of expansion in household and business outlays compared with the same quarter a year earlier. The prior reading, for the first quarter of 2026, likewise measured spending growth against the corresponding period a year before, showing a marginally stronger 2.20% increase.

The data suggest that while private consumption and investment in Mexico continue to grow on an annual basis, momentum has softened modestly as the year progresses. Both the current and previous readings are based on a year-over-year comparison, aligning Q2 and Q1 performance with the same quarters in the prior year.

The shift from -0.80% in Q1 2026 to 0.90% in Q2 2026 signals a notable improvement in domestic demand within a single quarter. In quarter-over-quarter terms, the latest reading reflects not only a recovery from the previous slump but also a net strengthening in private sector activity. The “actual” figure compares second-quarter spending to the first quarter, while the “previous” figure captured the first quarter’s decline relative to the quarter before it, highlighting a clear turnaround in momentum for Mexico’s private consumption and investment.

On the rates side, longer-dated Treasury yields stayed below the multi-decade highs reached earlier in the week, with crude oil and refined product prices pausing after recent rallies. A unanimous rate hike by the FOMC also helped ease fears that the Federal Reserve might allow underlying inflation to run too hot.

In equities, Alphabet and Meta rose roughly 2.5% and 1.5%, respectively, in premarket trading, building on the recovery in AI-focused megacaps since benchmark borrowing costs peaked earlier in the week. Shares tied to AI infrastructure also advanced, clawing back losses after recent concerns over AI security risks prompted investors to reassess the pace of spending on data centers and semiconductors. Bank stocks, by contrast, edged lower.

In contrast, the Bank of Japan also raised borrowing costs by 25 basis points, in line with expectations, but two policymakers dissented. Their opposition suggested the BOJ may move more cautiously on further rate hikes than previously anticipated, putting additional downward pressure on the yen. Over the week, the dollar is up nearly 1.3%.

The flat reading suggests that the pace at which households and businesses are parking funds in banks has neither accelerated nor slowed compared with the prior measurement, keeping deposit dynamics on a steady trajectory. While the unchanged rate does not reveal directional shifts in savings behavior, it underscores a consistent deposit environment for lenders and policymakers monitoring liquidity and funding conditions in the financial sector.

The flat reading indicates that demand for bank credit has neither weakened nor strengthened compared with the prior period, pointing to a degree of stability in borrowing activity. While no sector breakdown was provided, sustained double‑digit growth in bank loans is typically associated with ongoing momentum in economic activity and investment appetite.

With the growth rate steady at 19.1%, markets and policymakers will be watching upcoming data to see whether this level of credit expansion can be maintained, or if tighter financial conditions or changing demand patterns begin to show up in the lending figures in the months ahead.

The reduction in reserves suggests a net drawdown of around USD 4.93 billion over the latest period, which could reflect factors such as central bank intervention in the currency market, valuation changes in reserve assets, or external payments. While still high by historical standards, the slight decline may draw attention from investors monitoring India’s external stability and its capacity to manage currency volatility.

Market participants and analysts are likely to watch upcoming releases closely to see whether this downturn in reserves proves temporary or signals the start of a broader trend in India’s external position.

Despite Friday’s uptick, the 10-year yield is on track to end the week about 2 bps lower, after briefly exceeding 5.04% ahead of the FOMC announcement—its highest level since 2007—amid concerns about the Fed’s ability to curb inflation and the impact of persistently high oil prices. A third consecutive daily decline in oil prices provided some near-term relief on the inflation front and helped ease pressure on the bond market.

Tata Group stocks led the declines, with TCS, Titan and Tata Steel falling between 1.7% and 4.3%, amid renewed uncertainty over the conglomerate’s control structure and leadership. Other major laggards included Asian Paints (-2%), Maruti (-2%), Tech Mahindra (-1.8%), Sun Pharma (-1.6%) and NTPC (-1.6%).

In contrast, Adani Ports outperformed, rising 3.8% after global brokerage Jefferies pointed to multiple growth drivers across the group’s infrastructure and energy businesses. Over the week, the Sensex slipped about 0.7%.

At the same time, Saudi Arabia indicated that its East–West pipeline could return to service in the coming days, following a shutdown caused by attacks from Iran-aligned forces. The disruption halted the transfer of 7 million barrels per day to the Red Sea, a key alternative export route amid tanker blockades in the Persian Gulf.

The prolonged interruption of tanker traffic from the region has led several major OPEC producers to reduce output, with Saudi production recently falling to its lowest level since 1990. Declining oil inventories in China, the world’s largest importer, prompted higher purchase orders in August, while US Strategic Petroleum Reserve (SPR) levels remain near historic lows.

The main driver was energy, where inflation jumped to 22.8% from 15.8% in the previous month, reflecting renewed upward pressure on global oil prices. Inflation also picked up in other categories: consumer goods inflation rose to 2.1% from 1.6%, supported by higher prices for both durable consumer goods (2.5% vs 0.7%) and non-durable consumer goods (2.0% vs 1.7%), while inflation for intermediate goods increased to 7.4% from 6.4%.

In contrast, inflation for capital goods moderated, easing to 1.4% from 2.3%.

By sector, price pressures intensified most notably in utilities, where inflation climbed to 12.8% from 8.1%, and in manufacturing, where it rose to 5.9% from 4.7%. Inflation eased slightly in the mining sector, slipping to 72.5% from 73.0%, but remained exceptionally high.

On a monthly basis, industrial producer prices increased by 0.8% in August, matching the pace recorded in July.