Of the four Federal Reserve districts which have released their November manufacturing surveys – all were in expansion. A complete summary follows.
Analyst Opinion of Dallas Fed Manufacturing Survey
This survey remains in positive territory with new orders and unfilled orders declining but remaining in positive territory. This should be considered a weaker report than last month.
The expectations from Econoday was 24.0 to 35.0 (consensus 28.6), and the reported value was 8.4. From the Dallas Fed:
Texas factory activity continued to expand in November, albeit at a markedly slower pace, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, remained positive but fell nine points to 8.4, indicating output growth continued to abate.
Other indexes of manufacturing activity also suggested notably slower expansion in November. The survey’s demand indicators—the new orders and growth rate of new orders indexes—declined to 9.7 and 4.8, respectively, representing their lowest readings in 20 months. The capacity utilization index fell six points to 9.4, and the shipments index fell nine points to 7.7, both at their lowest levels in at least 20 months.
Perceptions of broader business conditions remained positive overall but were less optimistic than in October. The general business activity and company outlook indexes posted double-digit declines, coming in at 17.6 and 13.7, respectively. These readings are lower than what has been seen over the past year but still well above long-term averages. The index measuring uncertainty regarding companies’ outlooks rose five points to 12.3, indicating uncertainty was more widespread this month.
Labor market measures suggested continued but slower employment growth and longer workweeks in November. The employment index retreated eight points to 15.9, a level well above average. Twenty-three percent of firms noted net hiring, compared with 7 percent noting net layoffs. The hours worked index edged down to 4.9.
Price and wage increases eased in November. The raw materials prices index posted a 21-point decline to 33.7 after reaching a seven-year high last month. The finished goods prices index also fell, down 10 points to 7.5. However, both indexes remained well above average. Compensation costs also continued to rise at a faster clip than normal, although the pace slowed from October, with the wages and benefits index moving down eight points to 24.9.
Expectations regarding future business conditions remained positive in November, although they were less optimistic than in October. The indexes of future general business activity and future company outlook remained well above average but fell to 25.7 and 31.4, respectively. Other indexes of future manufacturing activity showed mixed movements this month but remained solidly in positive territory.
Dallas Fed (hyperlink to reports):
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Source: Dallas Fed
Summary of all Federal Reserve Districts Manufacturing:
Richmond Fed (hyperlink to reports):
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Kansas Fed (hyperlink to reports):
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Philly Fed (hyperlink to reports):
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New York Fed (hyperlink to reports):
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Federal Reserve Industrial Production – Actual Data (hyperlink to report):
Holding this and other survey’s Econintersect follows accountable for their predictions, the following graph compares the hard data from Industrial Products manufacturing subindex (dark blue bar) and US Census manufacturing shipments (lighter blue bar) to the Dallas Fed survey (light blue bar).
Comparing Surveys to Hard Data:
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In the above graphic, hard data is the long bars, and surveys are the short bars. The arrows on the left side are the key to growth or contraction.
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