US: Industrial production likely to expand 0.4% in June – BMO CM

US industrial production should expand 0.4% in June, its second strongest result so far this year, as the manufacturing sector recovers May’s contraction, according to Michael Gregory, Deputy Chief Economist at BMO Capital Markets.

Key Quotes

“Indicators such as hours worked were flat again this month, but the ISM index’s production component surged 5.3 points, the largest monthly move in eight years, after falling 1.5 points previously. Meanwhile, mining output should still find support from the uptrend in crude oil production as utilities output finds support from slightly higher-than-normal net energy usage for air conditioning. This should push up the capacity utilization rate 3/10s to 76.9%, matching the highest level in more than two years but still very far from ringing any inflation alarm.”