Global| Nov 30 2015Dallas Fed Factory Sector Activity Improves; Employment Figures Strengthen
by:Tom Moeller
|in:Economy in Brief
Summary
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 [...]
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 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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