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US: Dallas Fed Manufacturing Survey
| Consensus | Consensus Range | Actual | Previous | |
| General Activity Index | 1.3 | 0.7 to 1.6 | 11.6 | 1.3 |
| Production Index | 16.1 | 10.1 |
Highlights
A better than expected showing for manufacturing activity for the Dallas Fed district as current activity accelerates in August. The Dallas Fed’s general activity index rises to 11.6 in August from flat readings of 1.3 in July and 0.0 in June. The Econoday consensus looked for no change in August at 1.3.
Other current indicators picked up steam. Current production improves to 16.1 in August from 10.1 in July and 4.1 in June. New orders, the leading indicator, jumps to 22.0 in August from 6.4 in July and 2.3 in June.
Employment underperforms at 8.0 in August versus 12.2 in July and 13.9 in June. Capex is 8.2 in August versus 12.2 in July and 11.4 in June.
Inflation pressures remain problematic. Prices paid for raw materials is up to 44.1 in August from 41.3 in July and 42.4 in June. Prices received is at 22.7 in August versus 25.6 in July and 28.6 in June.
On the six-month outlook, general business conditions are strengthening further at 37.2 in August versus 26.5 in July versus 25.9 in June.
Market Consensus Before Announcement
The index is seen unchanged at 1.3, suggesting relatively flat business activity from July.
Definition
The Dallas Fed Manufacturing Survey tracks factory activity in Texas on a monthly basis. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month. Responses are aggregated into balance indexes where positive values generally indicate growth while negative values generally indicate contraction. About 100 manufacturers regularly participate in the survey.
Description
Investors track economic data like the Dallas Fed Manufacturing Survey to understand the economic backdrop for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a moderate growth environment that will not generate inflationary pressures. The Dallas Survey gives a detailed look at Texas' manufacturing sector, how busy it is and where it is headed. Since manufacturing is a major sector of the economy, this report can have a big influence on the markets. Some of the survey indexes also provide insight on inflation pressures -- including prices paid, prices received, wages & benefits, and capacity utilization. The Federal Reserve closely watches this report because when inflation signals are flashing, policymakers can reset the direction of interest rates. As a consequence, the bond market can be highly sensitive to this report. The equity market is also sensitive to this report because it is an early clue on the nation's manufacturing sector, reported in advance of the ISM manufacturing index and often in advance of the NAPM-Chicago index.