MNI DATA PREVIEW: July IP Seen Up 0.2% On Utilities

     WASHINGTON (MNI) - Industrial production is expected to rise by 0.2% in the

July report to be released on Thursday, with manufacturing production likely to

soften. Mining production is also expected to post a modest decline, partly on

the modest impact of Hurricane Barry. Providing some offset, utilities

production is expected to rise sharply on record-breaking temperatures in the

month. The Bloomberg consensus looks for a smaller 0.1% gain.

     Here are some key points to keep in mind:

     - Analysts misses in the MNI survey in July have been slightly tilted

toward underestimates in the last 10 years, but more recently there have been

overestimates in each of the last two years. So the slight tendency to

underestimate is not a guarantee of a surprise gain.

     - The manufacturing data for July recorded a 0.6% dip in aggregate hours,

reflecting a sharp deterioration in hours worked. Factory payrolls did rise to

16,000 in July from 12,000 in June, but that was not enough to offset the

shorter workweek.. Additionally, there was a large decline in the ISM

Manufacturing production index.

     - With multiple outlets reporting record-high temperatures in a number of

regions in July, utilities are likely to add substantially to production on

increased air conditioning usage. This follows a sharp decline in the

milder-than-usual June.

     - After last month's gulf storm Hurricane Barry, some analysts predicted

smaller mining output due to inclement weather. However, the number of rigs

online only declined by seven, suggesting that most were back online quickly.

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

--MNI Washington Bureau; +1 202 371 2121; email: alexandra.kelley@marketnews.com

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

[TOPICS: MAUPR$,M$U$$$]