U.S. May Industrial Production - Improvement above trend may be difficult to sustain
May industrial production has seen a surprisingly strong rise of 0.9%, both overall and in manufacturing, the latter more than reversing a 0.4% decline in April. This is stronger than a previously near flat trend, though that may prove difficult to sustain.
Autos were not a major factor with manufacturing ex autos up by 0.9% after a 0.3% April decline.
Weather-sensitive utilities saw some stength with a 1.6% rise which outweighed a 0.3% decline in mining, the latter the third straight modest decline.
While positive manufacturing output contrasts a slower ISM manufacturing index in May, the trend in the ISM manufacturing series had improved since early in the year.
That the ISM manufacturing improvement may be fading suggest we are not heading for a run of strong industrial production figures.
