There were two important reports on the U.S. economy released this morning. First, total industrial production in America rose in October by 0.1 percent, according to new data from the Federal Reserve Board of Governors. That was the 5th monthly increase in a row but worse than expected and the year-over-year pace of growth slowed to just 4.1 percent. As for capacity utilization, this leading indicator of inflation and potential output fell in October to 78.4 percent, the weakest reading since July. Although recent surveys suggest that concerns about tariffs and rising input costs (materials and labor) are weighing on factory activity, Fed officials instead believe that much of the slowdown in October and September was due to temporary headwinds caused by hurricanes Florence and Michael. Subsequent reports will therefore be more revealing about the underlying strength of industrial production.
Elsewhere, a few weeks after every big monthly job report comes out, more detailed information is released showing a breakdown of the payroll gains and losses in each state. The latest of these extended reports revealed that nonfarm employment in October increased in nine states and was essentially unchanged everywhere else. The largest payroll gains last month were found in California (+36,400), Texas (+32,300), and North Carolina (+27,900), while the biggest increases on a year-over-year basis have occurred in Texas (+384,800), California (+308,700), and Florida (+232,600). As for joblessness, the unemployment rate fell to a record low in Texas (3.7 percent) and Washington (4.3 percent) in October, and fourteen states ended the month with a rate of joblessness below the national level (3.7 percent). For some comparison, during the worst part of the “Great Recession,” eleven states had an unemployment rate at or above 11 percent.
Sources: Econoday, FRBG, U.S. DoL, Calculated Risk, FRBSL
Post author: Charles Couch