The Dallas Fed manufacturing activity index moderated in January. The index fell to 16.6 in January versus 26.0 in December. The index was ace eight month low but remaining above zero still implies an accelerating manufacturing sector.
- New orders came in at 20.0 versus 19.8 last month
- Growth rate of orders 12.6 versus 13.4 last month
- Unfilled orders 13.8 versus 10.5 last month
- Shipments 8.6 versus 20.5 last month
- Delivery time 17.9 versus 25.9 last month
- Finish good inventories -7.5 versus -3.3 last month
- Prices paid for raw material 62.1 versus 67.4 last month
- Prices received 37.1 versus 42.2 last month
- Wages and benefits 49.6 versus 46.5 last month
- Employment 27.7 versus 31.1 last month
- Hours worked 21.3 versus 19.6 last month
- Capital expenditures 11.3 versus 19.3 last month
The Dallas Fed commented that:
- Perceptions of broader business conditions improved slightly in January. The general business activity index remained positive but eased six points to 2.0. Similarly, the company outlook index moved down six points to 2.2. Uncertainty regarding outlooks escalated further, with the index pushing up 12 points to 30.8, its highest reading since April 2020 after the initial onset of the pandemic.
- Prices and wages continued to increase strongly in January, though price pressures eased slightly. The raw materials prices index remained highly elevated but dropped five points to 62.1. The finished goods prices index also fell five points, coming in at 37.1, but still far exceeded its historical average of 7.9. The wages and benefits index pushed up from 46.5 to 49.6, reaching a series high.
- Expectations regarding future manufacturing activity remained highly positive. The future production index receded slightly to 38.0, and the future general business activity index was largely unchanged at 16.5. Other measures of future manufacturing activity such as capital expenditures and employment showed mixed movements but remained solidly in positive territory.
