U.S. June Industrial Production - Tentative signs of underlying improvement
June industrial production has seen a 0.3% rise overall led by utilities which were lifted by unusually hot weather. Manufacturing saw a modest rise of 0.1%, but this is a second straight gain and the fourth rise in five months, with May revised up to 0.3% from 0.1%.
Mining provided only a partial offset to a 2.8% increase in utilities, falling by 0.2%, The rise in utilities looks less impressive when noting that May saw a decline of 2.5%.
Auto output slipped by 2.6% after a 4.6% rise in May. Manufacturing ex autos rose by 0.3% after a flat May and a 0.4% decline in April. This is consistent with a scare over tariffs after April’s announcement starting to fade. However, should tariffs pick up in August as threatened, manufacturing could take a fresh hit.
The signs of a modest improvement in manufacturing are consistent with the message of most manufacturing surveys, which while still unimpressive have seen some recent improvement. The ISM manufacturing production index moved above the neutral 50 level in June.
