In what’s clearly still an uncertain economy, we try not to read too much into the various monthly data releases. Still, a trio of reports suggests that despite labor shortages, inflation, and supply-chain problems, we’re seeing some indications of improvement.
Here they are:
Industrial production increased 1.6% last month, according to the Federal Reserve Bank.
Industrial production rose 1.6 percent in October after falling 1.3 percent in September; about half of the gain in October reflected a recovery from the effects of Hurricane Ida. Manufacturing output increased 1.2 percent in October; excluding a large gain in the production of motor vehicles and parts, factory output moved up 0.6 percent. The output of utilities rose 1.2 percent, and mining output stepped up 4.1 percent.
At 101.6 percent of its 2017 average, total industrial production in October was 5.1 percent above its year-earlier level and at its highest reading since December 2019. In October, capacity utilization for the industrial sector increased 1.2 percentage points to 76.4 percent; even so, it was still 3.2 percentage points below its long-run (1972–2020) average.
Economists cautioned that even with the better-than-expected October gain, production in coming months will be weighed down by continuing supply chain bottlenecks.
Retail sales increased 1.7% in October, according to the U.S. Census Bureau.
Advance estimates of U.S. retail and food services sales for October 2021, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $638.2 billion, an increase of 1.7 percent (±0.5 percent) from the previous month, and 16.3 percent (±0.9 percent) above October 2020. Total sales for the August 2021 through October 2021 period were up 15.4 percent (±0.7 percent) from the same period a year ago. The August 2021 to September 2021 percent change was revised from up 0.7 percent (±0.5 percent) to up 0.8 percent (±0.2 percent).
And, the National Association of Home Builders reports a bump in builder confidence.
Low existing inventories and strong buyer demand helped push builder confidence higher for the third consecutive month even as supply-side challenges — including building material bottlenecks and lot and labor shortages — remain stubbornly persistent. Builder sentiment in the market for newly built single-family homes moved three points higher to 83 in November, according to the NAHB/Wells Fargo Housing Market Index (HMI) released today.
“The solid market for home building continued in November despite ongoing supply-side challenges,” said NAHB Chairman Chuck Fowke. “Lack of resale inventory combined with strong consumer demand continues to boost single-family home building.”
“In addition to well publicized concerns over building materials and the national supply chain, labor and building lot access are key constraints for housing supply,” said NAHB Chief Economist Robert Dietz. “Lot availability is at multi-decade lows and the construction industry currently has more than 330,000 open positions. Policymakers need to focus on resolving these issues to help builders produce more housing to meet strong market demand.”
Positive indicators, all.