Production Rose Robust 0.6% For December --- Retail Sales Dropped 0.1% For Month, But Figure Possibly Was Distorted
WASHINGTON -- Production at the nation's factories, mines and utilities rose a strong 0.6% in December, the Federal Reserve Board said, providing further evidence that the economy picked up steam at the end of the year.</br></br>Separately, the Commerce Department reported that retail sales dropped 0.1% during December. But analysts said the number, which followed a strong 2% increase in November, might reflect difficulties in adjusting auto sales for seasonal variations. Excluding autos, sales rose a respectable 0.5% during December.</br></br>"The fundamentals are looking pretty good," said Robert Wescott, an economist with Wharton Econometrics Forecasting Associates in Philadelphia. "These kinds of conditions can sustain a broad expansion of the economy in 1985."</br></br>A survey of consumers by the Conference Board, an industry-supported, nonprofit economic research group, did raise a warning signal in the economic outlook. The Board's index of consumer confidence fell sharply to 85.6 in December from 96.8 in November, and its index of consumer buying plans dropped to 95.9 from 102.7, based on the norm of 100 that was set in 1969-70.</br></br>"With the relatively good economic news in recent weeks, the sag in consumer spirits was unexpected," said Fabian Linden, executive director of the Board's consumer research center. "There may be some recent weakening in the economy which has not yet registered in the standard statistical reports."