Sign up for our daily briefing
Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.
Stay on top of the latest market trends
Subscribe to Axios Markets for the latest market trends and economic insights. Sign up for free.
Sports news worthy of your time
Binge on the stats and stories that drive the sports world with Axios Sports. Sign up for free.
Tech news worthy of your time
Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.
Get the inside stories
Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Catch up on coronavirus stories and special reports, curated by Mike Allen everyday
Want a daily digest of the top Denver news?
Get a daily digest of the most important stories affecting your hometown with Axios Denver
Want a daily digest of the top Des Moines news?
Get a daily digest of the most important stories affecting your hometown with Axios Des Moines
Want a daily digest of the top Twin Cities news?
Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities
Want a daily digest of the top Tampa Bay news?
Get a daily digest of the most important stories affecting your hometown with Axios Tampa Bay
Want a daily digest of the top Charlotte news?
Get a daily digest of the most important stories affecting your hometown with Axios Charlotte
Photo: Costfoto/Barcroft Media via Getty Images
Retail sales were the big story on Wednesday, but the January readings of U.S. industrial production and producer prices also provided important insights into the economy.
The big picture: Industrial production rose by 0.9% month over month, following a downwardly revised 1.3% gain in December, and is rapidly approaching levels seen before the pandemic.
- However, the growth in production was well below the growth in retail sales, suggesting that either the increase is coming entirely from inventory reductions or exports.
- The pickup in U.S. imports and Chinese exports in recent months suggests it is the latter, and combined with supply constraints and bottlenecks in Asia could weigh on overall U.S. growth.
- U.S. capacity utilization has bounced back from its pandemic lows but is still at its lowest rate since February 2017.
The Producer Price Index rose 1.3% last month over December, the biggest gain since December 2009 when the government revamped the series. Producer prices rose 1.7% over January 2020 — strongly beating expectations of a 0.4% month-over-month gain and 0.9% annual gain.
Be smart: Taken together, the data tell a story of demand returning but supply not quite keeping up, meaning prices rise.