Productivity Report for Oct 31, 2026

Two metrics that measure commercial output and production are the Industrial Production Index, which measures the value of produced output, and Total Capacity Utilization (“TCU”), which measures actual output relative to what firms can produce. These series are closely tied to the Inventory-to-Sales Ratio: falling production and utilization usually leave goods sitting longer in inventory, while rising production and utilization accompany stronger final demand. In 2026, the productivity backdrop has been more constructive than the soft payroll prints alone would suggest. Nonfarm business productivity has continued to rise, supported by capital spending—especially data-center and AI-related investment—even as overall GDP growth has slowed to a more moderate pace.

That mix has important implications for banks. Stronger output per hour can support margins and credit quality even when hiring is flat, but it can also mean fewer incremental jobs for a given level of growth. Meanwhile, manufacturers and retailers are still balancing inventory carefully after several years of supply-chain and demand swings. Watching industrial production, capacity utilization, inventories, and retail sales together helps identify whether the goods sector is expanding with demand, overproducing into a slowdown, or absorbing earlier investment. This report tracks those relationships as of the current date.

Industrial Production

Capacity Utilization

Inventory-to-Sales Ratio

Retail Sales incl. Food Service