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Tuesday, May 29, 2012

Dallas Fed: Texas Manufacturing Expands but New Orders Remain Flat

by Calculated Risk on 5/29/2012 01:51:00 PM

From the Dallas Fed: Texas Manufacturing Expands but New Orders Remain Flat

Texas factory activity continued to increase in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, held steady at 5.5, suggesting growth continued at about the same pace as last month.
The general business activity index remained negative for the second consecutive month and edged down from -3.4 to -5.1.

Labor market indicators reflected slightly slower labor demand growth and shorter workweeks. Employment grew again in May, but the pace continued to slow; the index receded from 11.8 to 8.5. Eighteen percent of firms reported hiring new workers, while 10 percent reported layoffs. The hours worked index remained negative but edged up from -4.6 to -2.2.
This was below expectations of an increase in the general business activity index to +3.0.

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

The ISM index for May will be released Friday, June 1st, and these surveys suggest some decrease from the 54.8 reading in April.