PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Industrial Sector Bounces Back in October

By at 17 November, 2021, 10:34 am

by Raymond J. Keating –

After two tough months in a row, the industrial sector of the U.S. economy bounced back in October, according to the latest industrial production report from the Federal Reserve.

The Fed reported that after no growth in August and a decline of 1.3 percent in September, industrial production (i.e., the actual output of the manufacturing, mining and utility sectors of our economy, with no distortions due to prices, for example) grew by 1.6 percent in October.

Source: Federal Reserve Bank of St. Louis, FRED

Manufacturing production, which accounts for the biggest chunk of industrial production, grew by 1.2 percent in October, after declines of 0.7 percent in September and 0.3 percent in August.

For good measure, mining output expanded by 4.1 percent in October, compared to declines of 2.3 percent in September and 0.6 percent in August.

In a time with so much uncertainty, this was a welcome report. With inflation, supply chain issues and labor shortages persisting, and the Biden administration and Congress creating more questions with efforts focused on increasing costs and diminishing potential returns via tax and regulatory tax increases, let’s hope that the industrial sector of the U.S. economy can find persisting resilience, and work its way back to where it should be.

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

 

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