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l****z
发帖数: 29846 | 1 No Rebound in Manufacturing: "Surprisingly Weak" Industrial Production
Numbers; How Long Can Auto Sales Hold Up?
Following the rebound in consumer spending (heavily weighted to subprime
auto sales), economists expected a rebound in Industrial Production.
Instead, last month was revised lower, and this month was not only negative
but also lower than any economist's estimate in the Bloomberg Econoday
Consensus Range.
The hawks may have some good arguments at this week's FOMC meeting but
they won't have anything convincing to say on the manufacturing sector which
, instead of rebounding from a weak first quarter, appears to be slowing
further. All the main numbers in today's industrial production report are
below low-end forecasts with the headline at minus 0.2 in May and April
revised 2 tenths lower to minus 0.5. May is the fourth negative reading in
the last six months with the other readings at no change. Capacity
utilization fell 2 tenths to 78.1 percent which is the lowest rate since
January 2014.
The manufacturing component fell 0.2 percent in May for the third
negative reading in five months. Weakness in May was concentrated in
consumer goods and construction supplies, the latter a disappointing
indication for the housing sector. The mining component, at minus 0.3
percent, has really been hit hard by weakness in the energy sector but, in a
plus, contraction here seems to be easing. The utilities component is
positive but just barely at plus 0.2 percent.
Turning back to manufacturing, vehicles are actually a very big positive
with a third outsized gain in a row, at plus 1.7 percent in May vs 2.0
percent and 4.0 percent in the two prior months. This reflects very strong
consumer demand for cars and trucks underscoring unit vehicle sales which,
in previously released data, are the strongest in 10 years. Excluding
vehicles, however, the decline in May manufacturing slips another tenth to
minus 0.3 percent. Another area of strength is capital goods which is
showing life in the durable goods report and which here, tracked in the
business equipment subcomponent, shows a 0.2 percent gain for May.
Otherwise, however, this report is surprisingly weak and echoes this
morning's equally surprisingly weak Empire State report for June. Though
there are no separate readings on exports in either of this morning's
reports, weakness here appears to be pulling down the manufacturing sector.
Revisions
The Fed's Industrial Production and Capacity Utilization report shows there
has not been a positive report all year, but December 2014, February and
March 2015 were revised from negative numbers to zero. January and April
were revised lower from previously reported negative numbers.
click on chart for sharper image
Market Groups
Among the major market groups, only business equipment and business supplies
registered production gains in May, with increases of 0.2 percent and 0.1
percent, respectively. The production of consumer goods decreased 0.3
percent, as declines for both consumer energy
products and non-energy nondurables outweighed a gain for durable consumer
goods.
Industry Groups
Manufacturing output fell 0.2 percent in May, as a decrease of 0.7 percent
in the output of nondurables was partially offset by a small increase in the
production of durables. The largest gain among durable goods industries was
recorded by motor vehicles and parts; its index increased 1.7 percent.
Results for other durable goods industries were mixed, with none posting a
gain or loss exceeding 0.7 percent. Almost all major nondurable goods
industries registered declines, with the largest drop, 1.6 percent,
occurring in the petroleum and coal products industry.
How Long Can Auto Sales Hold Up?
The bright spot once again is autos. It was a big factor in in my June 11
report Retail Sales Bounce as Expected; How Much Longer Can Subprime Auto
Sales Lead?
I still maintain auto sales are going to collapse at some point, likely out
of the blue, and it will surprise the economists when it does happen. I don'
t know when, but suggest some time this year. Next month would not surprise
me in the least.
Car sales are registered when dealers take delivery. At the turn, dealers
who have been loading up are going to take some pretty steep losses on
inventory they will have a hard time unloading. |
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