Of the five Federal Reserve districts which have released their September manufacturing surveys – all are in expansion.
Analyst Opinion of Dallas Fed Manufacturing Survey
Important subindices new orders improved (remains in expansion) and unfilled orders marginally declined (remains in expansion). This should be considered a little better as last month.
The expectations from Econoday were 5.0 to 15.0 (consensus +8.5) for the general activity index and the reported value was 22.3. From the Dallas Fed:
Texas factory activity expanded in September for the fourth month in a row following a record contraction due to the COVID-19 pandemic, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose nine points to 22.3, its highest reading in two years.
Other measures of manufacturing activity point to above-average growth this month. The new orders index advanced five points to 14.7, and the growth rate of orders index held fairly steady at 13.2. The capacity utilization index rose from 10.9 to 17.5, while the shipments index was largely unchanged at 21.5.
Perceptions of broader business conditions continued to improve in September. The general business activity index pushed up six points to 13.6, its highest reading since November 2018. The company outlook index held mostly steady at 14.9, a reading well above average. Uncertainty regarding companies’ outlooks continued to rise, with the index positive but largely unchanged at 6.7.
Labor market measures indicated stronger employment growth and a continued increase in workweek length. The employment index pushed up from 10.6 to 14.5, suggesting more robust hiring. Twenty-four percent of firms noted net hiring, while 10 percent noted net layoffs. The hours worked index remained positive but moved down from 10.5 to 6.9.
Prices and wages increased further in September. The raw materials prices index rose seven points to 26.2, surpassing the series average. The finished goods prices index pushed up to 5.2, its highest reading in 17 months. Compensation costs continued to rise, with the wages and benefits index coming in at 15.9.
Expectations regarding future activity were generally more positive in September. The future production index pushed up further to a reading of 47.8, and the future general business activity index jumped eight points to 28.0. Most other measures of future manufacturing activity advanced 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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