National Manufacturing Activity Index Stronger On Mining And Utilities

Mining and utility output helped drive the national activity index to 0.27 in December vs a revised 0.11 percent in November and October's revised 0.87 outsized gain in a month that reflected the reversal of hurricane effects. October's gain is inflating the 3-month average which is up slightly at 0.42.

December's contribution from the production component jumped to 0.25 from November's minus 0.02 as mining and utilities, up a monthly 1.6 and 5.6 percent in the industrial production report, offset a soft 0.1 percent gain for manufacturing. The sales, orders & inventories component contributed 0.08 to December's headline gain, up from November's 0.04, and together with production offset weakness in employment, at plus 0.01 vs November's plus 0.12, and also personal consumption & housing, at minus 0.07 vs minus 0.03 with the report citing a step back in housing starts as the main factor for December's decline.

Putting mining and utilities aside, this report is mixed given the weakness in manufacturing, employment and also the housing reading.

Recent History Of This Indicator:
The economy is solid based on the national activity index which firmed through the second half of 2017 and included a 0.15 gain in November. Retail sales are likely to be a positive in the December report with building permits neutral. The manufacturing component of the industrial production report is a likely weakness. The consensus for December's national activity index is 0.25.