Of the four Federal Reserve districts which have released their January manufacturing surveys – three are in expansion and one is in contraction.
Analyst Opinion of Dallas Fed Manufacturing Survey
Important subindices new orders significantly improved (and is in expansion) and unfilled orders improving and but remaining in contraction. This should be considered a better report relative to last month.
The expectations from Econoday were -9.9 to -1.0 (consensus -3.1) for the general activity index and the reported value was 10.5. From the Dallas Fed:
Growth in Texas factory activity accelerated in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose seven points to 10.5, suggesting stronger output growth than last month.
Other measures of manufacturing activity also pointed to an acceleration in January. The new orders index shot up 16 points to 17.6, its highest reading in 15 months. The growth rate of orders index returned to positive territory, rising from -5.0 to 6.1. The capacity utilization and shipments indexes pushed further positive, coming in at 11.5 and 8.6, respectively.
Perceptions of broader business conditions were largely unchanged in January. The general business activity index came in at zero, with three-fourths of respondents noting no change this month and the rest split between improved and worsened activity. The January company outlook index reading was 1.9, with 78 percent of respondents noting no change in their outlooks. The index measuring uncertainty regarding companies’ outlooks edged down further to 2.7, a 20-month low.
Labor market measures suggested slower employment growth and no change in workweek length this month. The employment index retreated from 6.2 to 1.9, indicative of an abatement in hiring. Sixteen percent of firms noted net hiring, while 14 percent noted net layoffs. The hours worked index came in at zero.
Price pressures eased in January, while wage pressures inched up. The raw materials prices index declined five points to 9.5, a reading well below average. The finished goods prices index slipped into negative territory at -1.9, though the near-zero reading suggests no meaningful change in selling prices. The wages and benefits index ticked up to 16.3.
Expectations regarding future business conditions were slightly more optimistic in January. The indexes of future general business activity and future company outlook edged up to 7.6 and 15.6, respectively. Most other indexes for future manufacturing activity also pushed a bit further into 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 (red 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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