Instant view: Industrial output edges up in May

Reuters

NEW YORK (Reuters) - U.S. industrial output edged up just 0.1 percent in May as supply chain disruptions from the earthquake in Japan disrupted auto production for a second straight month, the Federal Reserve said on Wednesday.

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RUDY NARVAS, SENIOR ECONOMIST, SOCIETE GENERALE, NEW YORK:

"Industrial production was a little weaker than expected. One of the things though is that it looks like a lot of this was motor vehicles and utilities. Motor vehicles is not too much of a surprise given that what happened in Japan and the supply chain disruption is ongoing but it is less of an impact than it was in April. Utilities is mostly a weather thing and that should probably fade. So, it is not that bad when you look beyond those numbers."

TERRY SHEEHAN, ECONOMIC ANALYST, STONE & MCCARTHY RESEARCH ASSOCIATES, PRINCETON, NEW JERSEY

"These are a little disappointing but it looks like much of the softness was concentrated in utilities which were down more than expected. There certainly is some evidence that the slowdown in motor vehicle production had an impact here in the manufacturing portion of the data. But this will be a temporary effect.

"The Fed will certainly take this into account when they meet next week but the Fed does take a longer view. Many of the factors behind this data are likely to be temporary. The deflation risk has dissipated, so this just means the Fed will be on hold for longer."

FRANK DAVIS, DIRECTOR OF SALES AND TRADING AT LEK SECURITIES IN NEW YORK

"The utility portion of industrial output looks like it held back the number a bit, but this is a non-event with all the other factors out there. Overseas seems to be leading us down, with Greece especially a battering ram to get us lower, but we're hoping to see a low in oil prices, which could help us bottom in the near-term and hopefully move up from that base."

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