US Economics_ Production subdued even with temporary drag

Industry Overview * Industrial Production: Industrial production fell 0.3% MoM in October, slightly stronger than consensus expectations at -0.4%. The largest subset of manufacturing production declined 0.5% MoM. * Temporary Factors: The Federal Reserve indicated a 0.3pp drag from strikes and hurricanes during the month. These factors should rebound and boost IP in November. * Underlying Trend: The underlying trend of manufacturing activity remains subdued even without these temporary factors. * Near-term Outlook: The near-term outlook remains unclear. There could be some boost to activity from lifting of post-election uncertainty, but recently rising yields could weigh further on this ratesensitive sector. * Survey Data: Citi will be watching survey data like ISM manufacturing for any change in the outlook for still-soft underlying activity. Key Points * Industrial Production: Industrial production fell 0.3% MoM in October, slightly stronger than consensus expectations at -0.4% and Citi at -0.7% [6]. * Temporary Factors: The Federal Reserve indicated a 0.3pp drag from strikes and hurricanes during the month. These factors should rebound and boost IP in November [1]. * Underlying Trend: The underlying trend of manufacturing activity remains subdued even without these temporary factors [1]. * Near-term Outlook: The near-term outlook remains unclear. There could be some boost to activity from lifting of post-election uncertainty, but recently rising yields could weigh further on this ratesensitive sector [1]. * Survey Data: Citi will be watching survey data like ISM manufacturing for any change in the outlook for still-soft underlying activity [1].