Industrial Production Lower In May

A steep drop in vehicle production pulled industrial production lower in May, down 0.4 percent. Vehicle production had been leading this report but fell 4.2 percent in the month excluding which the headline loss would have been 2 tenths less severe at 0.2 percent. Utility output is always volatile and fell 1.0 percent, which isn't helpful, but mining for once is, up 0.2 percent for the first gain since August last year.

The manufacturing component, hit especially by vehicles, is the big disappointment, down 0.4 percent in the month. Declines sweep sub-components including consumer goods, business equipment and construction supplies. Year-on-year, manufacturing volumes are unchanged in what is reminder of how soft the factory is.

There's also downward revisions to April including manufacturing where the gain is 1 tenth more modest at 0.2 percent. The weakness of the factory sector, and its exposure to foreign markets and declining business investment, is contrasting very sharply right now with strength in the consumer sector.

Note that the traditional non-NAICS numbers for industrial production may differ marginally from the NAICS basis figures.

Recent History Of This Indicator:
Unusually big swings in utility output have been making for uneven readings in industrial production which is expected to slip 0.1 percent in May after jumping 0.7 percent in April. Mining has been a consistent negative while manufacturing has been a negative more times than not. Only a 0.1 percent increase in manufacturing production is expected for the May report, a result that would once again weigh on the factory outlook. The overall capacity utilization rate is expected to inch 2 tenths lower to 75.2 percent, a reading not consistent with price traction for goods.