US Industrial Production preview - Nomura

Analysts at Nomura offered their outlook for the day's data ahead in US Industrial production.

Key Quotes:

"We expect a steady 0.2% m-o-m increase in top-line industrial production in August (Consensus: 0.1%). Core (non-auto) manufacturing activity has been improving at a solid pace. According to the August employment report from the BLS, aggregate hours worked in the core manufacturing sector increased solidly by 0.6%, following a 0.3% increase in July. Further, various business survey data suggest continued healthy activity. These data point to strong growth in core manufacturing output. 

However, autos and auto parts production will likely remain weak as automakers continue to adjust their production levels. Weaker-than-expected auto sales in August, the seventh consecutive month of downside surprises, portend another month of weak autos output. Moreover, although oil and gas extraction continued to increase in August, the number of active oil rigs plateaued in July through August. 

For this reason, weak mining support sector output may likely offset a steady increase in oil and gas extraction output. Lastly, utility output likely fell in the month, lowering top-line industrial production. The summer heat in August was milder than historical norms, which may have reduced consumers’ need for cooling."