Several recent economic indicators, with the exception of a measure of the total output from the nation’s factories, mines and utilities production, have all moved higher. That indicates economic activity in the first month to month and a half of 2017 is still very much alive, despite recent concerns about the future following stock market gyrations.

A surge in multifamily production pushed overall housing starts up 9.7% in January to a seasonally adjusted annual rate of 1.33 million units after an upwardly revised December reading, according to the Commerce Department. The January level is the highest since October 2016.

“The growth in production is in line with our reports of solid builder confidence in the housing market,” said National Association of Home Builders (NAHB) Chairman Randy Noel. “A pro-business regulatory climate and increasing housing demand are boosting builders’ optimism, even as they continue to face supply-side hurdles such as rising construction material prices and access to lots and labor.”

Multifamily starts rose 23.7% to a seasonally adjusted annual rate of 449,000 units as single-family production posted a healthy 3.7% gain to 877,000 units.

“Demand for owner-occupied housing is rising due to favorable demographic tailwinds and a healthy labor market. Increases in after-tax incomes should help prospective buyers save for a down payment on a home,” said NAHB Chief Economist Robert Dietz. “As consumers continue to enter the single-family market, we should see builders increase production to meet this demand.”

Overall permit issuance, an indicator of future home building, rose 7.4% to a seasonally adjusted annual rate of 1.4 million units, a post-recession high. Multifamily permits registered a 26.5% gain to 530,000 while single-family permits edged down 1.7% to 866,000.

Industrial Production Down as Manufacturing Fails to Gain

Meantime, industrial production edged down 0.1% in January following four consecutive monthly increases, according to the Federal Reserve.

Manufacturing production was unchanged in January as mining output fell 1% while the index for utilities moved up 0.6%.

At 107.2% of its 2012 average, total industrial production was 3.7% higher in January than it was a year earlier.

Capacity utilization for the industrial sector fell 0.2 of a percentage point in January to 77.5%, a rate that is 2.3 percentage points below its 1972–2017 average.

Manufacturing output was unchanged in January for a second consecutive month while the index has increased 1.8% over the past 12 months. Major manufacturing industries recorded a broad mix of gains and losses in January.

Measured from fourth quarter to fourth quarter, total industrial capacity is projected to rise 2.3% this year after increasing 1.1% in 2017. Manufacturing capacity is expected to advance 1.5% in 2018, somewhat faster than the 0.7% pace in 2017.

Analysts at BMO Capital markets described this report as “another disappointing reading on the U.S. economy in January,” following news earlier in the week that showed soft retail sales. However, they noted the first quarter of the year has “a seasonal wonkiness to it” and they are not too concerned given broader figures showing the economy is still somewhat robust.

Wells Fargo Securities said, “Despite the only modest increase in manufacturing production reported for January, there is evidence that the resurgence in the factory sector has legs.”

Their analysts noted that in addition to figures about manufacturing activity in January, from the Institute for Supply Management, showed the sector is expanding, while anecdotal reports and discussions with manufacturers indicated the manufacturing sector is poised for further growth this year.

E-Commerce Retail Sales Continue Growing

On a more positive note, a separate Commerce Department report showed e-commerce sales in the U.S. continued making gains in the final quarter and for all of 2017.

They increased 3.2% in the October through December period compared to the third quarter of last year. That’s slightly better than the 2.7% increase in total retail sales during the same time frame.

When fourth quarter 2017 e-commerce sales are compared to the same time in 2016, they increased 16.9% versus the 5.7% gain in total retail sales.

Despite these gains, e-commerce sales’ share of the total retail market remained at the same level it was in the third quarter of 2017, 9.1%. When compared to the fourth quarter of 2016, e-commerce retail sales’ market share moved up from 8.2%.

Total e-commerce sales for 2017 were estimated at $453.5 billion, an increase of 16% from 2016 while total retail sales in 2017 increased 4.4% from 2016. E-commerce sales in 2017 accounted for 8.9% of total retail sales, up from a level of 8% in 2016.

Consumer Confidence Remains High

Lastly, a measure of consumer sentiment rose in early February to its second highest level since 2004 despite lower and much more volatile stock prices, according to preliminary numbers from the University of Michigan Survey of Consumers.

Its survey found that even among households in the top third of the income distribution, the Sentiment Index rose to 112.8, the highest level since the prior peak of 114.2, repeatedly recorded in 2007, 2004, and 2000.

Overall, the survey posted gains in its measures of consumer sentiment, including consumers’ evaluations of current economic conditions as well as their expectations.

“Stock market gyrations were dominated by rising incomes, employment growth, and by net favorable perceptions of the tax reforms. Indeed, when asked to identify any recent economic news they had heard, negative references to stock prices were spontaneously cited by just 6% of all consumers,” said Richard Curtin, the survey’s chief economist. “In contrast, favorable references to government policies were cited by 35% in February, unchanged from January, and the highest level recorded in more than a half century.”

He also said that the largest proportion of households reported an improved financial situation since 2000, and expected larger income gains during the year ahead.

“To be sure, higher interest rates during the year ahead were expected by the highest proportion of consumers since August 2005. Consumers also anticipated a slightly higher inflation rate, although the year-ahead inflation rate has remained relatively low and unchanged for the past three months,” Curtin said.

According to Curtin, purchase plans have been transformed from the attraction of deeply discounted prices and interest rates that outweighed economic uncertainty to being based on a sense of greater income and job security as the fewest consumers in decades mentioned the favorable impact of low prices and interest rates.