Dallas Fed Manufacturing Business Index Falls Sharply in January

The manufacturing activity in the State of Texas continued to expand during January for the eighth consecutive month, data released by the Federal Reserve Bank of Dallas on Monday showed.

The Dallas Fed Manufacturing Business Index recorded 4.6 in January, falling sharply from its level in December at 26.8, which indicated a slowdown in economic activity and output.

The new orders index dropped 13 points to 6.3, and the growth rate of orders index fell from 15.9 to 5.9. The capacity utilization index declined 10 points to 9.2, and the shipments index fell from 23.4 to 13.5.

Perceptions of broader business conditions continued to improve in January.

The general business activity index remained positive but edged down from 10.5 to 7.0.

The company outlook index also stayed in positive territory but retreated from 18.2 to 10.3.

Uncertainty regarding companies’ outlooks continued to rise, with its index rising by six points to 19.3.

The employment index came in at 16.6, down from 20.9 but still indicative of increased head counts.

Data further showed that 27% of firms reported net hiring, while 11% reported net layoffs.

The working hours’ index increased from 9.5 to 12.6.

The raw materials prices index rose from 50.8 to 55.0, its highest reading in nearly 10 years.

Meanwhile, the finished goods prices index remained elevated but declined from 19.0 to 13.9.

The wages and benefits index remained positive but edged down two points to 17.6, roughly in line with its series average.

The future production index declined from 47.3 to 43.7, while the future general business activity index rose by 12 points to 29.6.