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Economy in Brief

Dallas Fed Factory Sector Activity Improves; Employment Figures Strengthen
by Tom Moeller  November 30, 2015

The Federal Reserve Bank of Dallas reported that its November Composite index of factory sector activity increased to -4.9 from -12.7. The reading is up from the May low of -20.8. The production component showed the most improvement with a rise to 5.2, its highest level since December and up versus the -13.5 low six months ago. The employment reading jumped this month to the highest level since August of last year. During the last ten years, there has been a 78% correlation between the index and the m/m change in factory sector payrolls. The growth rate of new orders has shown more modest improvement since the March low and remained negative. Wages & benefits dipped m/m and have been trending sideways all year. Prices received for finished goods eased and has been negative all year. Wages & benefits similarly have trended sideways this year.

The six-months ahead reading for factory sector activity improved slightly m/m but remained well below the July high. Production also has improved little. The expected new orders growth rate similarly has changed little although expectations for shipments have risen modestly. The expected employment reading jumped to a twelve-month high, but wage & benefit expectations remained depressed.

The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month. The data can be found in Haver's SURVEYS database.

Dallas Federal Reserve Manufacturing Survey (SA, Percent Balance) Nov Oct Sep Nov '14 2014 2013 2012
General Business Activity Versus One Month Ago -4.9 -12.7 -9.5 10.1 8.3 2.2 -0.6
   Production 5.2 4.8 0.9 6.5 14.6 9.8 8.7
   Growth Rate of New Orders -7.3 -7.7 -4.3 -1.0 4.7 0.1 -2.8
   Number of Employees 11.6 0.3 -6.1 10.3 11.5 5.6 11.8
   Prices Received for Finished Goods -12.1 -9.5 -10.9 9.5 8.3 2.9 0.9
Business Activity in Six Months 7.3 4.1 4.8 17.7 17.4 11.0 7.6
   Production 34.1 34.3 24.7 39.3 42.7 37.1 32.4
   Future New Orders Growth Rate 24.3 19.6 15.2 28.8 31.5 25.0 19.5
   Number of Employees 24.6 19.1 6.1 25.1 28.6 23.1 19.1
   Wages & Benefits 33.6 33.3 41.5 41.0 43.0 38.2 34.2
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