U.S. industrial production improved in May, with manufacturing recording its first monthly rise in 2019. However, challenges for the factory sector remain, which should keep the industrial production trend subdued, noted Wells Fargo in a research report.
Sequentially, industrial production rose 0.4 percent in May, led by a 2.1 percent rise in utilities. Mining rose 0.1 percent, owing to oil & gas extraction, although a fall in new drilling points to a slowdown ahead.
Manufacturing output rose 0.2 percent, which was the first monthly rise in 2019. A recovery in motor vehicles helped drive the gain, but with sales under pressure, the pickup might be short-lived and modest compared to earlier this cycle, said Wells Fargo.
Business equipment rose 0.2 percent, but that only partly reversed last month’s fall of 1.5 percent. Industrial equipment strengthened; however, transit equipment was once again held down by Boeing-related softness in commercial aircraft.
“Overall, manufacturing activity remains weak. We expect the slowdown in global growth, strong dollar and lingering trade tensions to continue to weigh on production and investment”, added TD Economics.
At 17:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 149.908. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
