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16 Mar 2015
US industrial production falls, labour market/activity divergence intensifies – ING
FXStreet (Barcelona) - James Knightley, Senior Economist at ING, reviews the US Industrial Production data release, and further comments that January’s 0.5% downward revision was more disappointing than February’s 0.1% rise (consensus at 0.2%).
Key Quotes
“US industrial production rose 0.1% in February (0.2% consensus), but the big disappointment is the 0.5 percentage point downward revision to January output (originally reported as a 0.2% rise, but now confirmed as a 0.3% fall).”
“Consequently, capacity utilisation is down to 78.9% versus the 79.5% figure the market was expecting.”
“The February breakdown shows that manufacturing output was particularly weak, falling 0.2% after a 0.3% fall in January.”
“Utilities output jumped 7.3%MoM as power demand rose due to bad weather while mining output fell 2.5% - lower energy prices are deterring production here.”
“Today’s numbers again highlight the divergence between very strong labour market figures and weaker activity data – remember that retail sales have also fallen for three consecutive months.”
“We think that bad weather has been in play and the West Coast port disruption may have impacted the production flow of manufacturers. As such the labour market data may give us a better steer on the underlying fundamentals of the economy.”
“Nonetheless, while we think that the Federal Reserve will drop “patient” from the FOMC statement this week before hiking rates in June, this is not a done deal.”
Key Quotes
“US industrial production rose 0.1% in February (0.2% consensus), but the big disappointment is the 0.5 percentage point downward revision to January output (originally reported as a 0.2% rise, but now confirmed as a 0.3% fall).”
“Consequently, capacity utilisation is down to 78.9% versus the 79.5% figure the market was expecting.”
“The February breakdown shows that manufacturing output was particularly weak, falling 0.2% after a 0.3% fall in January.”
“Utilities output jumped 7.3%MoM as power demand rose due to bad weather while mining output fell 2.5% - lower energy prices are deterring production here.”
“Today’s numbers again highlight the divergence between very strong labour market figures and weaker activity data – remember that retail sales have also fallen for three consecutive months.”
“We think that bad weather has been in play and the West Coast port disruption may have impacted the production flow of manufacturers. As such the labour market data may give us a better steer on the underlying fundamentals of the economy.”
“Nonetheless, while we think that the Federal Reserve will drop “patient” from the FOMC statement this week before hiking rates in June, this is not a done deal.”