US Industrial Production lifted by manufacturing output - Wells Fargo
|Data released today showed that Industrial Production in the US expanded 0.3 in December. Analysts at Wells Fargo, point out that Manufacturing output notched a solid 1.1% increase to lift overall production. They highlighted that coal production jumped.
Key Quotes:
“Prior to today’s report, we knew that the production component of the ISM fell in December to 54.3 and while that is still in expansion territory, it marks the slowest pace of production growth since 2016. The 1.1% pick-up in manufacturing output was not only the fastest sequential increase in 10 months, it was more than three times larger than the scant 0.3% expected by the consensus.”
“Despite the fact that oil prices are down more than 30% from where they were in October, we have not yet seen a meaningful decline in mining output or in the rig count, which often leads mining activity.”
“Another wildcard in today’s report was an 11.6% jump in coal production. That is the biggest monthly increase in more than 35 years. We do not have an immediate explanation for the strength in this category, but we do not anticipate coal to be a likely driver of growth in 2019.”
“Capacity utilization came in at 78.7% in December which suggests less slack in the system since the early part of 2015. The higher capacity utilization back then was driven primarily by the mining sector.”
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