I posted this earlier:
September US Industrial Production data incoming later - preview
More now, this time via Nomura:
- Industrial production in August fell 0.9% m-o-m, 0.75pp of which was attributed to Hurricane Harvey's impact on the Gulf Coast region. The Federal Reserve Board released a detailed note describing its procedure for estimating the impact of the storm. September is likely to be affected by the continued recovery from Harvey as well as the landfall of Hurricane Irma in Florida. Thus, there is increased uncertainty on our forecast for September and potential for another downside surprise. Due to differences in industry composition in Florida, the Board noted that for September, "pulling together estimates of IP will present a number of challenges."
- That said, we expect headline industrial production to be flat in September. Recovery of autos and parts output and a modest rebound in utility output were likely positive to topline IP. However, while the output of petrochemical industries could rebound, softness in manufacturing ex-auto aggregate hours points to some weakness in core (ex-auto) manufacturing output, which we expect to be flat during the month. Moreover, oil and gas extraction fell while the oil and gas rig count also declined, suggesting some drag from mining output.
