US industrial production rises in June, as manufacturing remains muted

Industrial production rose 0.3% m/m in June (previous: -0.2%), printing modestly above our (0.1%) and consensus expectations (0.2%). The stronger-than-expected print for output was driven primarily by utility output (1.5% m/m, previous: 1.2%) and mining (1.0% m/m, previous: -2.1%). Apart from these two industry groups, manufacturing output, about three quarters of total industrial production, was flat in June as we had expected. The June data bring the Q2 growth rate of total industrial output to -1.4% (q/q saar), following 0.1% in Q1. This was the first quarterly contraction for IP since the recession. It is expected continue this downturn, driven by the impact of a stronger dollar and cutbacks in the energy sector from the decline in oil. Looking ahead, it is expected that, output for the sector to stabilize, but do not see a robust expansion as likely over the next few months, says Barclays.