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Economy in Brief

Dallas Fed Factory Sector Activity Erodes Further
by Tom Moeller  March 30, 2015

The Federal Reserve Bank of Dallas reported that its March Composite index of factory sector activity deteriorated to -17.4, the third consecutive negative monthly reading. The figure reflected weakness amongst most of the component series, most notably production which was at the weakest level since the end of the recession. The company outlook measure stabilized near the lowest level since May 2013 and the growth rate of new orders held near the recovery low. Employment turned negative to the lowest reading since May 2013. Pricing power also deteriorated to nearly its recovery low. Raw materials pricing remained depressed with lower commodity prices.

The business activity reading for six months ahead slipped to 3.0, down from its April 2014 high of 25.3. The company outlook figure moved up a bit m/m but remained depressed versus its high in January of last year. The future production figure also improved m/m to its best reading since November. Expected new orders growth recovered as well to its best level since November. The reading for future employment rebounded to its best level in three months, though it remained down from its high early last year. The reading for wages expected in six months, however, deteriorated. Workers' hours improved to the best level since November. The expected workweek also recovered to a four-month high.

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) Mar Feb Jan Mar '14 2014 2013 2012
General Business Activity Versus One Month Ago -17.4 -11.2 -4.4 5.8 8.3 2.2 -0.6
   Production -5.2 0.7 0.7 18.1 14.6 9.8 8.7
   Growth Rate of New Orders -15.3 -16.3 -18.0 9.4 4.7 0.1 -2.8
   Number of Employees -1.8 1.3 9.0 15.0 11.5 5.6 11.8
   Prices Received for Finished Goods -9.8 -4.4 -6.7 7.9 8.3 2.9 0.9
Business Activity in Six Months 3.0 5.5 -6.4 18.0 17.4 11.0 7.6
   Production 36.2 24.9 22.1 47.3 42.7 37.1 32.4
   Future New Orders Growth Rate 28.3 12.8 12.9 34.2 31.5 25.0 19.5
   Number of Employees 18.3 9.2 15.3 32.6 28.6 23.1 19.1
   Wages & Benefits 34.2 37.2 28.2 47.8 43.0 38.2 34.2
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