The July U.S. industrial production report undershot estimates
The July U.S. industrial production report undershot estimates with a -0.2% July figure after small net downward revisions over the prior three months. The drop reflected a -0.4% decline for manufacturing that tracked hours-worked but defied a firm 11.6 M vehicle assembly rate. Analysts saw an oddly big -1.8% mining drop alongside the expected 3.1% weather-led utility surge. Industrial production has yet to reverse the four-month decline through April from a December peak, despite ongoing growth for GDP and factory employment, with a tight path for initial claims. Analysts expect a 1.7% growth rate for industrial production in Q3, following rates of -2.1% (was -1.2%) in Q2 and -1.9% in Q1. Industrial production is poised for 1.1% growth in 2019, alongside an estimated 2.4% clip for GDP. The factory sector outperformed GDP over the past two years, with respective gains of 3.9% and 2.9% in 2018, and 2.3% and 2.4% in 2017. Industrial production contracted at rates of 1%-2% over the 2015-16 period.