The January 2018 Beige Book, covering late November through the end of the year, found a robust expansion in the Dallas Federal Reserve district and modest to moderate gains in all eleven other districts. Employment continued to grow at a modest pace and most districts reported labor shortages which constrained growth in some cases. Wages increased at a modest pace and a few districts reported wages rising in a broader range of industries and positions than in the previous report. In most regions prices grew modestly to moderately with several districts reporting input price increases in manufacturing, construction and transportation and some businesses reporting that they now have the ability to increase their selling prices.

After a downwardly revised -0.1% drop in November, industrial production jumped +0.9% in December primarily due to a +1.6% increase in mining and a +5.6% increase in utility production. Manufacturing output edged up +0.1%, aided by a +2.0% increase in auto production, but was dragged down by production drops for home electronics (-3.5%), housewares (-0.9%), and chemical products (-0.6%). On a yearly basis mining was up +11.5%, utilities were up +1.8%, manufacturing was up +2.4%, and capacity utilization rose to 77.9%, the highest level since February 2015.

Housing starts in December dropped lower than analyst expectations to a seasonally adjusted annual rate (SAAR) of 1.192 million (-8.2%), with a +2.6% bump in construction of housing with 5 or more units providing a minor offset to a -11.8% drop in single family construction. There were 1.202 million housing units started in 2017, which was +2.4% higher than the 1.173 million units started in 2016. Housing completions rose +2.2% in December to a 1.177 million SAAR, with housing completed in 2017 up +8.7% to an estimated 1.152 million units. Construction permits remained steady in December at a 1.302 million SAAR, with notable gains in the Northeast (+43.0%), a drop in the South (-11.1%), and a +2.8% gain compared to December 2016.