Dallas Fed Manufacturing Survey Showing Some Life

The decent of the Dallas Fed report may be flattening out, hopefully. The production index posted its second straight positive reading, at 5.8 in April vs 3.3 in March, but the really good news is new orders which popped into the plus column, to 6.2 following four straight declines. Capacity utilization is another plus, up for a second month.

Still, the overall assessment is negative, at minus 13.9 for the general activity index which is a 16th straight negative score, a run that can be traced back directly to the collapse in oil prices. Employment remains weak, at minus 3.7 for a fourth straight contraction. Price data do show some life with wages up and raw materials, which had been week, also up. Selling prices, however, remain a big negative, at minus 6.6 for what is also a 16th straight month in the wrong column.

The ongoing recovery for oil is having a positive effect on energy prices and is likely to have a wider positive effect for the Texas manufacturing area. And perhaps this report, though still mostly weak, is a turning point.

Recent History Of This Indicator:
The Dallas Fed general activity index showed some life in March and a little more is expected for April where the consensus is at minus 9.0. Stuck in contraction for 15 straights, the index did improve by 18 points in March to minus 13.6, a still deeply negative reading for a region getting mauled by the weakness in energy prices.