12/29/2014
By Jennifer Coombs

In the month of December, the Dallas Fed’s Manufacturing Outlook Survey noted increased activity in factory activity throughout the district according to key business executives. The production index, which measures state manufacturing conditions, has an impressive increase in the month to 15.8 from 6.0 in November. This indicates that output grew at a faster pace in December. Other manufacturing measurements also pointed to strength during the months; capacity utilization increased to 12.4 from 9.8 in November and shipments climbed to 19.6 which is the highest reading in the last five months. New orders, on the other hand, moved lower to 1.3 from 5.6 in the month before, which suggests that demand growth is moderating, even though a quarter of the firms surveyed had noted increased in new orders over November. Labor market data reflected unchanged workweeks, but employment numbers are definitely improving. The employment index was steady at 9.2, with 17% of firms indicating net hiring compared to only 7.0% reporting net layoffs. The business activity index fell to 4.1 from 10.5 in the previous month, but this still implied that broader perceptions of economic conditions remained positive. The decline in business activity is most likely due to the recent collapse in oil prices. 

Jennifer Coombs
Wall Street Strategies

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