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15 May 2015
US industrial production falls for fifth straight month – ING
FXStreet (Barcelona) - Reviewing the US industrial production data result, James Knightley, Senior Economist at ING, notes that the yet another fall of 0.3% mom, posts a dim picture for the expected bounce in Q2 GDP.
Key Quotes
“US industrial production for April has fallen 0.3%MoM , worse than the 0.0% consensus forecast, but there was a three tenths of a percentage point upward revision to March so on levels terms output is in line with expectations.”
“In terms of the components, manufacturing output was flat on the month after rising 0.3% in March with auto production providing the main area of strength, rising 1.3%MoM. However, the bulk of the other components were either flat or down.”
“Utilities was surprisingly down 1.3% after a 5.4% drop last month. We had assumed a better outcome here given weather patterns have been returning to normal.”
“Rounding out the numbers was a 0.8% drop in mining, led by a 14.5% drop in oil and gas well drilling. This again highlights how the plunge in the oil prices hasn’t been universally positive for the US economy.”
“Taking this altogether, industrial output has now fallen for five straight months, which is not the sort of environment in which the Federal Reserve raises interest rates. Certainly, the oil price effect has been in play and dented oil and gas output, but manufacturing has also been subdued.”
“With retail sales also looking fairly soft, expectations of a decent bounce in 2Q GDP after 1Q's weakness are starting to evaporate.”
Key Quotes
“US industrial production for April has fallen 0.3%MoM , worse than the 0.0% consensus forecast, but there was a three tenths of a percentage point upward revision to March so on levels terms output is in line with expectations.”
“In terms of the components, manufacturing output was flat on the month after rising 0.3% in March with auto production providing the main area of strength, rising 1.3%MoM. However, the bulk of the other components were either flat or down.”
“Utilities was surprisingly down 1.3% after a 5.4% drop last month. We had assumed a better outcome here given weather patterns have been returning to normal.”
“Rounding out the numbers was a 0.8% drop in mining, led by a 14.5% drop in oil and gas well drilling. This again highlights how the plunge in the oil prices hasn’t been universally positive for the US economy.”
“Taking this altogether, industrial output has now fallen for five straight months, which is not the sort of environment in which the Federal Reserve raises interest rates. Certainly, the oil price effect has been in play and dented oil and gas output, but manufacturing has also been subdued.”
“With retail sales also looking fairly soft, expectations of a decent bounce in 2Q GDP after 1Q's weakness are starting to evaporate.”