US Industrial Production Experiences Significant Increase in May

In May, US Industrial Production saw a significant increase of 0.9% month-on-month (MoM), three times the expected 0.3% MoM. This is a considerable improvement from the unchanged MoM print in April. This is the largest MoM increase since January 2023, pushing the year-on-year (YoY) print to +0.39%.

Exceeding Expectations

This surge in production is the largest beat of expectations since July 2023, surpassing all estimates.

Manufacturing Output Also on the Rise

Manufacturing output also experienced an increase, rising 0.9%, primarily driven by consumer goods. This comes after a revised 0.4% decrease in April, pushing the YoY change in manufacturing output to 0.1% YoY.

Increased Capacity Utilization

Capacity Utilization also saw an increase, reaching 78.7%, which was better than expected.

Contrasting Data

These figures contrast with other data that suggests manufacturing has struggled to gain momentum due to high input prices, inconsistent consumer demand, and high borrowing costs. The Institute for Supply Management's most recent measure of factory activity showed a faster rate of shrinkage in May, with output nearing stagnation.

Anticipating Downward Revisions

The next step is to wait for potential downward revisions.

What's Your Take?

This recent surge in US Industrial Production is certainly noteworthy. However, it's worth considering the contrasting data and potential downward revisions. What are your thoughts on these developments? Do you think this growth is sustainable, or will the manufacturing industry continue to face challenges? Share this article with your friends and discuss it further. Also, don't forget to sign up for the Daily Briefing, which is delivered every day at 6pm.