Despite strong ISM Manufacturing data, US Industrial Production disappointed in May, rising just 0.1% MoM (vs +0.3% exp), but April's print was revised up to +0.9% MoM. Put together, that lifted the YoY rise in industrial production to +1.67% - its highest since Nov 2025...

Manufacturing excluding motor vehicles and parts was also flat in May, according to the Fed report.

Mining output, which includes energy extraction, increased 1.3%.

Utilities output fell.

US Manufacturing production was unchanged in May (below the 0.3% rise expected), but thanks to an upward revision, the YoY rise was +1.4%, the highest since Nov 2025...

May's flat-line comes after four months of gains to start the year.

The data showed a split between durable goods manufacturing, which continued to advance, and nondurable goods manufacturing, which declined.

That decrease reflected a pullback in output for petroleum and coal products, plastics and rubber, and textiles.

And finally, on the bright side, Capacity Utilization continues to rise, now at its highest in a year...

The report is somewhat at odds with signals from recent surveys, which have indicated a pickup in activity amid customer stockpiling induced by the war, rising defense-related orders and the ongoing data center buildout.

Monday’s figures may be a sign that surging costs are starting to bite after a separate report last week showed prices received by producers rose in May from a year earlier at the fastest pace since 2022.

Taken all the above, we see this as favoring the doves very modestly.