Synopsis:

Both Morgan Stanley and Barclays anticipate a weak October industrial production report, primarily due to strike and weather-related disruptions. Morgan Stanley forecasts a 0.9% month-over-month decline, while Barclays expects a 0.3% decline, marking the second consecutive monthly drop, with manufacturing hit hardest by seasonal adjustments and disruptions.

Key Points:

• Morgan Stanley’s Forecast: A 0.9% month-over-month decline in industrial production, reflecting broad sectoral weakness caused by strikes and adverse weather.

• Barclays’ Projection: A 0.3% month-over-month drop, driven by a significant 0.5% decline in manufacturing due to disruptions and challenging seasonal adjustments, particularly in auto assemblies.

• Manufacturing Component Weakness: Both banks expect manufacturing to bear the brunt of the decline, with sector-specific disruptions amplifying seasonal adjustment effects.

Conclusion:

Morgan Stanley and Barclays both foresee a substantial decline in October industrial production, particularly in manufacturing, driven by strike-related and weather disruptions. This report is likely to reflect ongoing sectoral weaknesses, emphasizing near-term challenges in US industrial activity.