Thursday, November 16, 2017

Industrial production and real retail sales evidence of strong underlying trend

 - by New Deal democrat

A couple of weeks ago I wrote:
Dallas Fed and the Chicago PMI both improved even more from September to October: ... As a result, even taking into account that these have been outperforming industrial production this year, it is likely that manufacturing production when it is reported for October several weeks from now will be a positive, and most likely slightly better than last month's.
The average of the four non-southern regional Fed manufacturing indexes was +20. The Chicago PMI was 66.2, which translates to +32.4. The average was roughly +22, which translates to +.4 in the industrial production manufacturing index. Even subtracting a few tenths of a percent still gave a positive number.

Well, overall industrial production, and the manufacturing index, both came in strong for October:

While some of this may be a hurricane related rebound, the above regional calculations show that the underlying national trend remains quite positive.

A similar situation obtains with regard to real retail sales.  The overall number was up +0.1%:

But even if we subtract out autos, given the need to replace ruined vehicles, real retail sales while not higher, maintained the big increase from September:

So the Doomers can't use the hurricanes as an excuse. Right now the economy is hitting on almost all cylinders (wage growth for nonsupervisory workers still stinks).