Regional indications point to a very strong month of May including the
Dallas Fed's general activity index which jumped 5 points to 26.8 to
beat Econoday's consensus by 3.6 points. Production, up 10 points to
35.2, is at a 12-year high as is capacity utilization which surged 13.5
points to 32.2. And strength in orders points to greater utilization
ahead with the growth rate of new orders up 8 points to 26.5 for yet
another 12-year high. Employment is up 6 points to 23.4 which is a
6-year high.
With all this strength it's no surprise that price
and wage pressures remain "highly elevated" as the report says,
underscored by a rise for finished prices where a quarter of the sample,
which numbers roughly 100 in any one month, reporting gains in the
month.
How long can these rates of growth go on before business
expansion -- because of lack of capacity especially for employment --
begins to slow is the question especially for this sample.
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