Monday, January 30, 2012

Dallas Fed Manufacturing Survey shows expansion in January

by Calculated Risk on 1/30/2012 10:39:00 AM

This is the last of the regional Fed surveys for January. The regional surveys provide a hint about the ISM manufacturing index - and all of the regional surveys were stronger in January.

From the Dallas Fed: Texas Manufacturing Activity Picks Up

Texas factory activity increased in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 0.2 to 5.8, suggesting growth resumed this month.

Other measures of current manufacturing conditions also indicated growth in January. The new orders index jumped to 9.5, its highest reading in six months, after two months in negative territory. ... Perceptions of broader economic conditions were notably more positive in January. The general business activity index shot up to 15.3 after dipping into negative territory in December.
...
Labor market indicators reflected continued labor demand growth. The employment index came in at 12.2, up from 9.9 in December. ... The hours worked index continued to suggest average workweeks lengthened.
...
Expectations regarding future business conditions were markedly more optimistic in January.
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 (dashed green, through January), and five Fed surveys are averaged (blue, through January) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through December (right axis).

The ISM index for January will be released Wednesday, Feb 1st and the regional surveys suggest another small increase in January. The consensus is for a slight increase to 54.5 from 53.9 in December.