Dallas Fed Manufacturing Survey Soars As Respondents Demand “Lower Interest Rates Now”

Texas factory activity picked up notably in July, according to business executives responding to the Texas Manufacturing Outlook Survey.

The production index, a key measure of state manufacturing conditions, jumped 20 points to 21.3, its highest reading in more than three years and its biggest MoM jump since March 2021…

New Orders, Shipments, and Capacity Utilization all saw improvements month over month with labor market measures also suggesting an improvement in employment and work hours.

Current inflation views declined (but notably pries received are well below prices paid suggesting margin pain)…

But looking ahead, inflation expectations are rising…

Tariffs were, obviously, an often mentioned topic:

• Recent tariff announcements to countries where we purchase raw materials and packaging supplies will strain our operations and result in price increases, potentially leading to decreased demand.

• Tariffs [are an issue of concern].

• Tariff impacts continue to hurt our overall business and profitability.

• Tariffs. Tariffs. Tariffs. Did I mention Tariffs?

• The tariff matters continue to cause major uncertainty. It is impossible to plan. It is causing uncertainty throughout the supply chain.

• We are starting to see vendors and suppliers pass on more price increases, with “tariffs” being the explanation. 

But for some , there was a renewed optimism as uncertainty declines:

• We are starting to see orders roll in at a much higher rate than we have in previous months.

• In many respects, we seem to be kicking the same can down the same proverbial road, but I, personally, feel like I see the light at the end of the tunnel.

• We build machines (capital equipment) in five segments: oil and gas, defense, marine, hydropower and nuclear power. All of these segments are spending money, and the vibe is positive.

• Capital is being spent to add product offerings to increase business activity

We give the final word to a ‘Computer and electronic product manufacturing’ business owner who said: 

“Please lower interest rates now, like other countries are doing.”

Don’t hold your breath for anything this week!