Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
X •  LinkedIn
  Industrial Production Increased 1.6% in October
Posted Under: Autos • Data Watch • Employment • Industrial Production - Cap Utilization • Inflation • COVID-19
Supporting Image for Blog Post

Implications:  US industrial activity came surging back in October after disruptions from Hurricane Ida and factories rushed to boost output to meet strong demand. The gains were broad-based, with every major category contributing to the rebound.  Looking at the details, the manufacturing sector led the headline index higher, rising 1.2%.  Both auto and non-auto manufacturing posted strong gains.  And, while it's too early to say for sure, the 11.0% increase in the auto sector may be a signal that some supply-chain issues like the lack of semiconductors may be beginning to ease.  Meanwhile, activity in the mining sector (think oil rigs in the gulf) rebounded 4.1%.  We expect this sector to be a tailwind for overall industrial production in the months ahead as crude oil and natural gas extraction ramps up, spurred by prices that are now at the highest levels since 2014.  Looking at things more broadly, today's gains once again put industrial production above pre-pandemic levels, though only by 0.3%. This means production still has a long way to go to meet current demand.  For context, this morning's report on retail sales showed that even after adjusting for inflation, "real" retail sales are up 13.5% over that same time period.  Ongoing issues with supply chains and labor shortages are hampering a more robust rise in activity, with job openings in the manufacturing sector currently near a record high and more than double pre-pandemic levels.  This mismatch between supply and demand is why inflation continues to defy the "transitory" narrative.  Look for industrial production to continue bouncing back in the months ahead.  In other recent manufacturing news, the Empire State Index, a measure of New York factory sentiment, soared to +30.9 in November from +19.8 in October.  Notably, the index for prices paid by factories for inputs rose to the second highest level on record.

Click here for a PDF version
Posted on Tuesday, November 16, 2021 @ 12:14 PM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.