US Industrial Production in May Slows with Manufacturing Falling

Industrial production slowed in May with manufacturing the culprit. Total industrial production rose 0.2% month-over-month in May lower than the consensus 0.5% following an upwardly revised 1.4% increase (from 1.1%) in April. The capacity utilization rate increased to 79.0% again missing the consensus 79.3% from a downwardly revised 78.9% (from 79.0%) in April.

US May Industrial Production Highlights

  • Manufacturing output decreased 0.1% after increasing 0.8% in April.
  • Motor vehicle assemblies increased 2.0% month-over-month to a seasonally adjusted annual rate of 10.72 million units.
  • Mining production rose 1.3% after increasing 1.1% in April.
  • Utilities output jumped 1.1% after increasing 5.5% in April.
  • Total industrial production was up 5.8% yr/yr.
  • The capacity utilization rate of 79.0% was 0.5% below its long-run average.
United States Industrial Production MoM

The fall in manufacturing output does follow three months where growth averaged nearly 1.0%, we look to next month to see if the crashing consumer sentiment is flowing through to business sentiment. Consumers reported a stunning loss of confidence in June the preliminary University of Michigan Index of Consumer Sentiment showed. The index in June dropped to 50.2 (consensus 59.0) from the final reading of 58.4 for May. The June reading compares to 85.5 in the same period a year ago and is the lowest reading ever on records dating back to 1978.

United States Capacity Utilization

Inflation pressures are seriously undermining consumer sentiment. The losses in confidence were widespread across income, age, and education subgroups and observed across all regions.

The University of Michigan’s data showed consumers anticipate inflation will rise 5.4% over the next year, matching March and April’s readings and marking the highest levels since 1981. The losses covered all aspects of the economy, from personal finances to prospects for the economy, including inflation and unemployment.

Source: Federal Reserve

From The TradersCommunity News Desk