1/26/2015
By Jennifer Coombs

The Dallas Federal Reserve released its manufacturing data for the month of January, and it told much of the same story as the Empire State and Philly Fed releases. Factory activity in Texas was flat for the month, with the production index coming in at 0.7. The production index is a key measure of the manufacturing conditions in the state, and this reading essentially noted that output was unchanged from December. Other measurements reflected sluggish activity during the month; the utilization index dropped to a reading of 5.1, the lowest in five months, and the shipments index dropped from 20.8 to 6.0. New orders also moved lower from 2.7 to -7.7 for the first negative reading in new orders since April 2013. Perceptions of business conditions worsened in the month, with both the general business index (-4.4) and the company outlook index (-3.8) dropping below 0 for the first time in 20 readings. The employment index was 9.0 in January, slightly below December’s reading, but close to its average reading over the past two years. In fact, 20% of firms reported net hiring compared with 11% reporting net layoffs. Given the shutdown of many oil rigs and refineries expected in Texas over the coming months, we can expect these numbers to change for the worst next month as well.

Jennifer Coombs
Wall Street Strategies

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