The Dallas Fed’s manufacturing general business conditions index rose sharply to 13.1 in February after 1.0 in January, well above market expectations. Expectations for six months from now rose as well, up to 17.7 in February after 11.7 in January. The improvement was at least in part due to lessened uncertainty with the index down to 4.0 from 15.6.
However, the category indexes were generally softer in February from the prior month. New orders continued to expand, but at a slower pace while backlogs were only slightly stronger. Shipments ere little changed, as were delivery times. Inventories contracted somewhat. The measures of the labor market, however, were broadly stronger. Employment rose to 12.6 in February from 6.6 in January and wages were up to 28.9 after 27.4. The workweeks expanded at a more modest pace at 1.8 after 3.6.
Prices paid levels off along with energy costs, while prices received continued to increase at a tempered pace.
The calculation for the Dallas-ISM equivalent index reflected a decrease in February to 52.6 after 53.6 in January, but is about on trend with recent months. The Dallas measure doesn’t have the strongest correlation to the ISM index, but in context with the other available data, points to a softer number when the national report is released at 10:00 ET on Friday, March 1.
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