Weekly Economic Roundup: Industrial Production and the “Beige Book”

By at 21 April, 2017, 7:26 am


by Raymond J. Keating-

Two notable takes on the economy were served up this week. Let’s take a quick look at key points from each.

Manufacturing Production Off. For March, industrial production (which measures the real output of the manufacturing, mining, and electric and gas utilities industries) rose by 0.5 percent. But that was all about a record increase in utilities output at 8.6 percent, which was the largest monthly jump in the history of the index due to heating demands returning to seasonal norms. Manufacturing output, unfortunately, declined by 0.4 percent in March, which was the first decline since August of last year. Hopefully, this proves to be a one-month decline. The previous six months had shown a pick-up in manufacturing production that had been lacking since late 2014.

“Modest-to-Moderate” Take on the Economy. The Federal Reserve’s Beige Book continued with its longtime theme of “modest-to-moderate” economic growth. The report opened:

“Economic activity increased in each of the twelve Federal Reserve Districts between mid-February and the end of March, with the pace of expansion equally split between modest and moderate. In addition, the pickup was evident to varying degrees across economic sectors. Manufacturing continued to expand at a modest to moderate pace, although growth in freight shipments slowed slightly. Consumer spending varied…”

Tracking the overall take on the economy, employment growth also was classified as “modest to moderate.”

Significant Gains Needed on Pro-Growth Policies

The bottom line remains that this economy has real work ahead to get out of a funk that has been about poor economic growth since this recovery/expansion period began in mid-2009. Business and consumer confidence certainly have moved up since the November election. Also, there have been some positive steps taken via presidential executive orders, such as on the regulatory front (including the signing of several significant congressional review act resolutions by President Trump), and in terms of quality administration appointments.

However, investors and entrepreneurs need to see substantial, positive carry through in providing tax and regulatory relief in order to translate those positive feelings into actions in the marketplace. We have seen real change emerging, for example, in terms of changes at the FCC under its new chairman, Ajit Pai, with the commission recognizing the benefits of market competition, sound economic analysis on regulatory matters, and the ills of unnecessary, costly regulation.  This type of change in policy direction provides certainty and incentives to stoke investment, which our economy desperately needs. Chairman Pai’s bold leadership needs to be duplicated across agencies and by Congress.

In the near term, small business owners and entrepreneurs want to see massive changes to Obamacare and our nation’s tax system. Action on these two items, as promised by President Trump and the GOP majority, will maintain small business optimism and provide real relief that will lead to more investment, quality job creation, higher wages, and improved levels of growth for our economy.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP: The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.


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