US Industrial Production: Still-low levels of manufacturing activity – Wells Fargo

After a record drop in April, May saw manufacturing production increase by the most since the 1950s, point out Wells Fargo’s economist. They argue that declines in output at utilities and mines held broader industrial production to a gain of just 1.4%.

Key Quotes: 

"While the 3.8% pop in May for manufacturing output was the best since 1959, it was still short of the 5.0% gain expected by the consensus after the biggest drop on record the month prior."

“Re-opening at auto plants around the country led to a more-than-doubling of motor vehicle and parts production (+120.8%). Still, even after that increase in May, the level of output for autos is still less than a quarter of the way back to its peak.”

“Utilities output fell 2.3% in May. The shift to working from home may be providing some lift here, but clearly not enough to offset the still-low levels of manufacturing activity and the draw on the power grid that activity demands.”