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The Industrial Production index climbed in June 0.6% to 107.7. Analysts at Wells Fargo, point out that it represents a new high and note that much of the improvement was owed to a 0.8% rebound in manufacturing output.

Key Quotes:  

“Output from the manufacturing and mining sectors both increased over the month, growing 0.8 percent and 1.2 percent, respectively.”

“The improvement out of the manufacturing sector was driven by a 7.8 percent bounce-back in motor vehicles and parts production.”

“There was little evidence that recently-imposed tariffs boosted production of steel or aluminum in June.”

“Total industry capacity utilization increased to 78.0 percent in June. Utilization has risen 11.3 percentage points since the low of 66.7 in 2009; however, it remains slightly below the long-run average of 79.8 percent.”

“June’s industrial production figures worked to bridge the divide between the upbeat survey data and the comparatively modest production measures. Overall, output increased 3.8 percent year-over-year in June and has increased 6.0 percent annualized in the second quarter. Given the strength of the ISM index, which sits at 60.2 as of June, we expect industrial output to advance to a level consistent with the positive sentiment expressed through the various manufacturing surveys.”