The term "October surprise" is often reserved for political bombshells that can move the needle in an election, but the number of positive economic reports that emerged over the past few weeks have been surprisingly upbeat in light of 2016's mediocre performance.
While nothing has signaled a major turnaround for the economy, a handful of small gains could help build momentum heading into the year's final quarter. Recent examples include:
- According to the Federal Reserve, reports from the 12 Federal Reserve Districts suggest national economic activity continued to expand since the last Beige Book report. Economic activity from late August to early October increased at a modest or moderate pace in most districts.
- Also according to the Federal Reserve, industrial production in the U.S. increased 0.1 percent in September after falling 0.5 percent in August. For the third quarter as a whole, industrial production rose at an annual rate of 1.8 percent for its first quarterly increase since the third quarter of 2015. Manufacturing output increased 0.2 percent in September and moved up at an annual rate of 0.9 percent in the third quarter.
- The Producer Price Index for final demand was up 0.3 percent in September, seasonally adjusted, according to the U.S. Bureau of Labor Statistics. Final demand prices were unchanged in August and declined 0.4 percent in July. On an unadjusted basis, the final demand index increased 0.7 percent for the 12 months ended in September, the largest 12-month rise since advancing 0.9 percent in December 2014.
- August U.S. cutting tool consumption was up 4.3 percent year-over-year to $175.2 million, according to the U.S. Cutting Tool Institute and AMT – the Association for Manufacturing Technology. This total, as reported by companies participating in the Cutting Tool Market Report collaboration, was also up 19.2 percent from July.
- And the Conference Board Employment Trends Index increased in September to 128.5, up from 128 in July. This represents a 1.1 percent gain in the ETI compared to a year ago.
Other green shoots in recent weeks: U.S. manufacturing technology orders increasedU.S. exports and imports grewnew orders for manufactured goods improved.
Look for more about how the distribution industry fared during the third quarter and its expectations for the final three months of 2016 and next year when the results of the third-quarter 2016 MDM-Baird Distribution Survey are published in the Oct. 25 issue of MDM Premium.
