Three months of building surge eased this month for the Dallas Fed
manufacturing report. The general activity index slowed 15 points to
21.4 which is under the low estimate but still an extremely favorable
reading, and an arguably more favorable reading given that prior
strength was pointing to unwanted capacity stress.
Production
fell more than 15 points to 12.7 with new orders down 17 points to 8.3
and employment down 8 points to 10.8. Capacity utilization fell 10
points to 9.6 with hours worked and also wages and selling prices both
cooling. Input costs, however, ticked higher to a 7-year high which is a
reminder that demand in this sample is unquestionably robust.
Outlook
measures for Dallas manufacturers also eased but remain very strong,
which is the takeaway from today's report. Watch tomorrow for a March
update from the Richmond Fed where Econoday's consensus is also calling
for slowing growth.
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