As we in Louisiana know as much as, if not more so, than anybody else, a hurricane is serious business. The disruption of Hurricane Sandy, hitting the nation’s financial capital, hurt maybe even more than a typical hurricane.
The Federal Reserve said Friday that factory output, the most-important component of industrial production, fell 0.9 percent in October from September. It would have been unchanged without the storm, the Fed said.
Even as the storm’s impact was gauged, though, economists said the dim numbers in the industrial production report suggest underlying issues that have not gone away despite some improvement in various economic measures over the past few months.
“The report suggests the economy still lacks momentum, partly because of the uncertain fiscal outlook,” said Sal Guatieri, an economist at BMO Capital Markets.
His comment reflects a widespread uncertainty in business because of impending and significant problems in Washington. Even as President Barack Obama met with leaders in Congress, there is a concern that a deal that can meet the newly re-elected president’s proposals — some higher-end tax increases as well as budget cuts — will be beyond the political system’s capacity.
We hope that is not the case. The industrial production report may have taken a hit from Sandy, but the reality is that the overall economy needs a durable deal — one that lasts more than few weeks or months — on taxes and spending.
No one likes to pay higher taxes. But the sooner that long-lasting deal is done, the better these economic reports are going to look.