US Industrial Production Slows In June Despite Jump In Auto Manufacturing

After May's modest rebound from a six-month downtrend, the plunge in global PMIs suggested that June US Industrial Production would decelerate and it did, printing unchanged from May to June.

However, both the headline and manufacturing sector saw year-over-year growth slow...

Under the hood:

  • Utilities fell 3.6% in June after rising 2.4% in May (Fed says utility output fell on milder-than-usual temperatures that reduced the demand for air conditioning)

  • Production of motor vehicles and parts rose 2.9% in June after rising 2.3%.

US Manufacturing rose 0.2% in May (its first MoM rise since Dec 2018) and June saw a better than expected 0.4% MoM rise but YoY manufacturing growth slowed to +0.4%...

For the second quarter, factory production declined at an annual rate of 2.2% for the first back-to-back declines since 2016.

Finally, notice the dramatic regime shift between US Industrial Production and the Dow Jones Industrial Stock Index.

Until 1987 - when Greenspan unleashed the Fed Put - the stock average traded at around 18x the Industrial Production index.

It now trades at 230x!! Intervention has consequences it seems.