US: Industrial production likely to print -0.2% for May – Wells Fargo

Research Team at Wells Fargo, suggests that the US industrial production reversed course in April as the weight from the mining sector was offset by gains in utilities and manufacturing of consumer goods and expects a print of -0.2% for May.

Key Quotes

“Utility companies saw output surge as weather patterns promoted more-normal levels of demand for natural gas and electricity. Improvement in manufacturing output was led by machinery and auto vehicles & parts, a possible sign that the worst of the manufacturing slump is behind us. The waning pressure from the dollar appreciation supports this notion, as does the ISM index in recent months.

Still, other measures of the factory sector are less convincing, such as the “strong” durable goods report that we noted was less than first meets the eye. Not to mention that manufacturers cut jobs again in May after April’s slight gain. We remain unconvinced that the factory sector is firming. The string of mixed signals in recent months reminds us that one month does not make a trend. We approach May with caution.”