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US DATA: Surprisingly Weak IP Data A Reminder Of Bifurcated Economy

US DATA
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  • Industrial production was notably weaker than expected in November, slipping -0.1% M/M (SA, cons 0.3) after a downward revised -0.4% (initial -0.3).
  • Utilities were an outsized drag with -1.4% after +1.4% although manufacturing production was still weak, at 0.2% M/M (cons 0.5) after a downward revised -0.7% M/M (initial -0.5).
  • After three consecutive M/M declines, the Y/Y has pushed more firmly negative to -0.9% Y/Y (lowest since Jan and before that early 2021) whilst 3M/3M rates for both IP and mfg production pushed lower still at -2.9% annualized.
  • Combine with capacity utilization surprisingly falling to 76.8% (cons 77.3, lowest since Apr 2021) after a downward revised 77.0% (initial 77.1) and there are clear signs of the manufacturing sector continuing to struggle whilst service activity grows strongly. 

  • Core durable goods orders do however point to some upside relative to these weak trend growth rates for IP, with the same for the lift off recent lows for the ISM manufacturing survey.

     

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  • Industrial production was notably weaker than expected in November, slipping -0.1% M/M (SA, cons 0.3) after a downward revised -0.4% (initial -0.3).
  • Utilities were an outsized drag with -1.4% after +1.4% although manufacturing production was still weak, at 0.2% M/M (cons 0.5) after a downward revised -0.7% M/M (initial -0.5).
  • After three consecutive M/M declines, the Y/Y has pushed more firmly negative to -0.9% Y/Y (lowest since Jan and before that early 2021) whilst 3M/3M rates for both IP and mfg production pushed lower still at -2.9% annualized.
  • Combine with capacity utilization surprisingly falling to 76.8% (cons 77.3, lowest since Apr 2021) after a downward revised 77.0% (initial 77.1) and there are clear signs of the manufacturing sector continuing to struggle whilst service activity grows strongly. 

  • Core durable goods orders do however point to some upside relative to these weak trend growth rates for IP, with the same for the lift off recent lows for the ISM manufacturing survey.

     

  •