Monday, November 28, 2016

Dallas Fed: Regional Manufacturing Activity "Continues to Expand" in November

by Bill McBride on 11/28/2016 10:36:00 AM

Note: All regional Fed surveys indicated expansion in November. This is the first time all regional surveys were positive in two years (the decline in oil prices hit some regions hard - like Dallas).

From the Dallas Fed: Texas Manufacturing Activity Continues to Expand

Texas factory activity increased again in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, posted a fifth consecutive positive reading and edged up to 8.8. ...
...
The general business activity index shot up to 10.2 after nearly two years of negative readings.
...
Labor market measures indicated increased employment levels and longer workweeks. The employment index came in at 4.5 after a near-zero reading last month. Seventeen percent of firms noted net hiring, compared with 13 percent noting net layoffs. The hours worked index returned to positive territory in November, coming in at 2.5. ...
emphasis added
This was the last of the regional Fed surveys for November.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Fed Manufacturing Surveys and ISM PMI Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (yellow, through November), and five Fed surveys are averaged (blue, through November) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through October (right axis).

It seems likely the ISM manufacturing index will show expansion again in November, and the consensus is for a reading of 52.3.