Strong rebound in US Industrial Production due to ending of GM strike - ING

Commenting on the Federal Reserve's Industrial Production data, "industrial production has rebounded strongly in November, primarily due to the ending of the GM auto workers strike," noted ING analysts. "Industrial output jumped 1.1% month-on-month in November versus the consensus forecast of a 0.9% rise, but October’s growth rate was revised down a tenth of a percentage point to -0.9% from -0.8%."

Key quotes

"While today’s numbers are good, we have to remember that looking at levels, manufacturing output in total remains 1.4% below the levels of year-end 2018 and 4.7% below the peak level of manufacturing output seen in December 2007. Even when taking into account the surge in oil and gas output over the past decade, industrial production in total is only 4% up on pre-Global Financial Crisis levels."

"Moreover, the conditions of weak global demand and the strong dollar remain in play. In this regard the ISM manufacturing series suggests that the tough times for the sector will continue, at least in the near term. The production index suggests output will continue to contract at a -2% year-on-year rate while the employment index points to manufacturing payrolls falling 10,000-15,000 per month - note the recent massive swings relating to the GM strike."

"With manufacturing continuing to struggle and the recent retail sales numbers suggesting a more subdued environment for consumer spending we continue to see 2020 growth more likely coming in closer to 1.5% rather than 2%."