US: Industrial Production rebounded in June – Nomura

Analysts at Nomura point out that the US industrial production rose 0.6% m-o-m in June, above market expectations but below Nomura’s forecast (Nomura: 0.9%, Consensus: 0.5%).

Key Quotes

“May estimates were revised down to a 0.5% m-o-m decline (previously reported as a 0.1% decline). Revisions were distributed across broad categories, suggesting that activity was likely slower in May than the Federal Reserve’s initial estimates implied.”

“The robust gains in Q2 appear consistent with our tracking model, which points to strong contribution to real GDP growth from equipment investment in Q2.”

“GDP tracking update: Residential electricity output declined more than we expected in June, suggesting less personal consumption of electric utility services in the month. Elsewhere, June industrial production report revised down auto assemblies in May, suggesting that disruptions caused by an auto parts plant, were greater than initially estimated.

Further, the rebound in auto assemblies in June was modestly weaker than we expected. Slower auto assemblies overall in Q2 relative to Q1 suggests less accumulation of auto inventories in Q2. Altogether, we lowered our Q2 real GDP tracking estimate by 0.2pp to 4.6% q-o-q saar.”