by Bill McBride on 6/29/2015 10:44:00 AM
Monday, June 29, 2015
From the Dallas Fed: Texas Manufacturing Activity Still Contracting
Texas factory activity declined again in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose to -6.5 but remained in negative territory, suggesting a fourth consecutive month of contracting output.This was the last of the regional Fed surveys for June. Three of the five surveys indicated contraction in June, mostly due to weakness in oil producing areas. However there was less contraction in those areas in June.
Perceptions of broader business conditions worsened further, although not as sharply in June as in prior months. The general business activity index jumped nearly 14 points to -7, its highest reading since January.
Labor market indicators reflected slight employment declines and shorter workweeks. The June employment index was negative for a second month in a row but pushed up 7 points to -1.2. Fourteen percent of firms reported net hiring, compared with 15 percent reporting net layoffs. The hours worked index inched up from -11.6 to -10.7.
Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:
Click on graph for larger image.
The New York and Philly Fed surveys are averaged together (yellow, through June), and five Fed surveys are averaged (blue, through June) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through May (right axis).
It seems likely the ISM index will be weak again in June, but will probably increase from the May level. The consensus is for an increase to 53.2 for the ISM index, from 52.8 in May.
Posted by Bill McBride on 6/29/2015 10:44:00 AM