Economic Watch: Industrial Production, Manufacturing, Retail Sales Post Solid Gains
The amount of output from the nation’s factories, mines, and utilities posted its third straight monthly increase in November, according to newly released figures, while separate reports showed manufacturing increasing even more last month while retail sales are surging.

The amount of output from the nation’s factories, mines and utilities posted its third straight monthly increase in November, according to newly released figure. And separate reports showed manufacturing increasing even more last month while retail sales are surging.
Industrial production increased 0.2% in November from the month before after posting an upwardly revised increase of 1.2% in October, according to the Federal Reserve. This latest rise was a tenth of a point less than expected by a survey of analysts.
Compared to the same time in 2016, industrial production has increased 3.4%.
Manufacturing production also rose 0.2%, marking its third consecutive monthly gain. Meanwhile, the output of utilities dropped 1.9% and mining increased 2%, as oil and gas extraction returned to normal levels after being held down in October by Hurricane Nate.
Excluding the post-hurricane rebound in oil and gas extraction, total industrial production would have been unchanged in November.
Total industrial production was 106.4% of its 2012 average in November and was 3.4% above its year-earlier level. Capacity utilization for the industrial sector was 77.1% in November, a rate that is 2.8 percentage points below its 1972–2016 average.
“Given the strength of October manufacturing and despite November's modest showing, most signals are pointing to an accelerating factory contribution to the fourth-quarter economy,” said analysts at Econoday.
December Manufacturing Best since January
This followed a preliminary report that showed U.S. manufacturing experienced a robust and accelerated improvement in business conditions during December, according to the U.S. Manufacturing Purchasing Managers’ Index from financial information services firm IHS Markit.
At a reading of 55, up from 53.9 in November, the measure signals the strongest upturn in operating conditions since January. A reading above 50 indicates manufacturing is expanding while below that level signals contraction.
December data pointed to sharper increases in production, new orders, and higher employment. The report also said anecdotal evidence suggested that greater domestic demand was a key driver of manufacturing growth at the end of the year.
A number of firms also cited efforts to boost operating capacity at their plants, which led to the steepest rise in payroll numbers since September 2014. Business optimism picked up for the third month running in December. The degree of positive sentiment was also the strongest since January 2016.
“Faster output and order book growth encouraged firms to add factory workers at the fastest rate for over three years, painting a bright picture of the goods-producing sector expanding capacity in response to resurgent demand,” said Chris Williamson, chief business economist at IHS Markit.
Retail Holiday Sales Start with a Bang
Meantime, a separate Commerce Department showed U.S. retail sales in November increased more than expected, indicating the holiday shopping season got off to a strong start.
The 0.8% increase from the month before was far better than analysts’ expectations while October’s increase was upwardly revised from 0.2% to 0.5% gain. When November is compared to November 2016, retail sales posted a whopping increase of 5.8%.
A separate report, from the National Retail Federation, showed November increased 0.9% over October and was up 6% year over year. Online and other non-store sales grew 10.5% year over year, reflecting the growth of online shopping. The numbers exclude automobiles, gasoline stations, and restaurants.
“This has been an impressive start to the holiday season, perhaps the best in the last few years,” NRF Chief Economist Jack Kleinhenz said. “The combination of job and wage gains, modest inflation and a heathy balance sheet along with elevated consumer confidence has led to solid holiday spending by American households.”
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