US: Manufacturing production looks solid - Wells Fargo

Today’s data from the US showed that industrial production rose 0.1% in July and manufacturing increase 0.3%. According to analysts at Wells Fargo, factory production shows no signs of slowing, while price pressures show no signs of easing. 

Key Quotes: 

“Industrial production expanded a scant 0.1 percent in July, which missed the mark of the 0.3 percent increase expected by markets. An upward revision to June, however, when activity is now reported to have risen 1.0 percent versus the 0.6 percent gain initially reported, more than makes up for the shortfall. The trend in industrial production remains solidly upward, with growth over the past year notching the biggest one-year gain since early 2011.”

“More meaningful in terms of economic activity was the 0.3 percent decline in mining output. That was the first monthly drop in more than year.”

“The juggernaut of industrial production, the manufacturing sector, however, shows no sign of slowing down. Factory output rose 0.3 percent in July.” 

“There are a few signs that new tariffs on steel and aluminum instated earlier this year are affecting domestic production.”

“While tighter capacity has helped to underpin new investment, price pressures for the sector still look elevated, with the ISM Prices Index above 70 since the start of the year, backlogs picking up and inventory growth slowing.”