U.S. industrial production and capacity utilization numbers continue to show broad weakness, and hint at the further easing of monetary policy in the United States.

U.S. industrial production numbers dropped 0.1% in July, more or less in line with consensus expectations. Only a large 4.7% gain in the vehicle industry bailed out was otherwise weak data.

High-tech continues to struggle, with communications equipment off 3.9% and electronic components down 2.7%. “Notably, high-tech output is now down from a year ago — the first drop since 1975, and compared with near-60% gains a year ago,” says BMO Nesbitt Burns.

“When component industries are all over the lot, we look at the percent of industries rising to get a bottom line. That index crashed to 33.5% in today’s data, the lowest in years. So, the July auto production pop concealed widespread weakness, which will encourage more Fed easing,” concludes BMO.