- US manufacturing output fell 0.1% in June versus the +0.4% consensus, with the bulk of the weakness caused by a 6.6% plunge in auto sector output.
- It is important to remember that the weakness is a supply-side story and not demand-driven, given surging prices for both new and used vehicles in Tuesday's CPI report.
- Outside of autos, the news was slightly better, with output excluding vehicles and parts rising 0.4%.
- On the other hand, order books remain close to record levels, while customer inventories are close to record lows.
For further details see:
Supply Strains Hold Back U.S. Growth