According to analysts at Wells Fargo, today’s US Industrial Production report contained encouraging signs, despite the main headline. Ex-autos, manufacturing production was up 0.5%, and after a Boeing-related hit during the first quarter, should improve as trade tensions have eased, analysts added.
“Output at the nation’s factories, mines and utility plants slipped 0.3% in December, but the decline was entirely due to a 5.6% plunge in utilities amid unseasonably warm weather.”
“Manufacturing output edged up 0.2%. Auto production was weak last month, consistent with weak sales as well as some potential lingering effects of the GM strike. Ex-autos, however, production bounced back a solid 0.5%."
“On trend, manufacturing activity shows tentative signs of turning around as headwinds from trade uncertainty have eased to some extent. Boeing’s production halt of the 737 MAX will hit Q1 production, but output should strengthen later in the year.”
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