Topsy Turvy Economic News

April 18, 2025 

The U.S. economy remains an enigma with its share of both bullish and bearish indicators.

The Federal Reserve reports that industrial production decreased 0.3% in March but increased at an annual rate of 5.5% in the first quarter. The March decline was led by a 5.8% drop in the index for utilities as temperatures were above normal for the month.

Capacity utilization for manufacturing edged up 0.2% point in March to 77.3%, a rate that is 0.9% below its long-run (1972–2024) average.

Manufacturing output rose 0.3% in March. First quarter factory output expanded 5.1% at an annual rate. The production of durable goods increased 0.6%. Durable goods output was led by motor vehicles and parts, aerospace, and miscellaneous transportation equipment, which rose 1.2% and 1.8%, respectively. Gains were seen throughout durable manufacturing. The production of nondurable goods was little changed. Gains in food, apparel and leather, chemicals, plastics and rubber products offset declines in textiles and product mills, paper, printing, and petroleum and coal products. The index for other manufacturing (publishing and logging) increased 0.5%.

At the other end of the spectrum is U.S. retail sales. This March metric increased by the most in two years as consumers went on a spending spree to avoid future price increases resulting from tariffs. According to the U.S. Census Bureau, retail sales rose in March as consumers flocked to buy goods ahead of the tariffs. Retail sales increased by 1.4% on a monthly basis in March, up from February's 0.2% increase and slightly ahead of analyst forecasts of 1.3% according to Newsweek. Core retail sales excluding autos and gas also rose by 0.8%.

Retail sales constitute a significant portion of overall U.S. spending and are considered a key indicator of consumer confidence and the overall health of the economy.