I don’t usually cover regional Fed reports individually, but this one is wild.
Today, the Federal Reserve Bank of Dallas released the Dallas Fed Manufacturing Report for April.
Texas factory activity continued to rise in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, was largely unchanged at 5.1, a reading indicative of modest growth.
Other measures of manufacturing activity signaled contraction, however. The new orders index plummeted 20 points to -20.0. The capacity utilization index edged down to -3.8, and the shipments index fell into negative territory for the first time this year, slipping to -5.5 from 6.1.
Labor market measures suggested a slight decrease in head counts and shorter workweeks this month. The employment index held fairly steady at -3.9, with 9 percent of firms noting net hiring and 13 percent noting net layoffs. The hours worked index slipped to -6.4 from -2.9.
Price pressures accelerated in April, while wage growth remained fairly stable. The raw materials prices index jumped 11 points to 48.4, its highest reading since mid-2022. The finished goods prices index rose nine points to 14.9, a reading well above average. Meanwhile, the wages and benefits index held mostly steady at 14.3, below its average reading.
Key Index Items
- Business activity decreased to -35.8 in April from from -16.3 in March. This is the lowest since May 2020.
- Production was still positive at 5.1, down from 6.0, but new orders decreased to -20.0 from -0.1.
- Prices paid for raw materials jumped to 48.4 from 37.7. This is the 60th straight month of rising input prices.
- Employment is -3.9, the third month of declines.
The index numbers are the number of companies reporting an increase minus the number of companies reporting declines.
For example, 54.6 percent of companies reported increasing prices for raw materials while 6.2 reported declining prices.
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Any drinking game word cards for the Canadian election coverage tonight?
Trump face plants the Texas economy!
Dallas Fed Manufacturing Index Collapses: Lowest Production Reading in 6 Years, Orders Contract 7th Month, New Orders 5th Month
Trucking rates for moving loads of specialty petroleum products to California from Texas are up by 50% (so far) because there are fewer cargoes to pick up and bring back to Texas. Dead Heads are hurting the truckers, and it is only getting started.
A high percentage of those truckers voted for trump.
Sweet poetic justice.
So how are those renters, Blacks and Latinos doing under the orange messiah?
Everything looks rosy if you’re wearing MAGA-colored glasses.
Well farmers are already getting screwed bigly…
https://www.cnbc.com/2025/04/28/trade-war-tariffs-full-blown-crisis-us-farm-exporters-say.html
Data released by the U.S. Department of Agriculture on Thursday revealed China made its biggest cancellation of pork orders since 2020, halting a shipment of 12,000 tons of pork.
AgTC said “massive” financial losses are already being felt by its members as a result of the trade war, based on reports it is receiving from member companies.
A wood pulp and paperboard exporter reported to the trade group the immediate cancellation or hold of 6,400 metric tons in a warehouse and a hold of 15 railcars sitting in what is known in the supply chain as “demurrage,” when fees are charged for delayed movement of goods.
Meanwhile, the exporter said, 9,000 metric tons of the product are on the water to China, expected to arrive May 13 and facing the threat of costly diversion to Chinese bonded warehouses or to other countries, as Chinese buyers may refuse the cargo and abandon it at port.
Well as MAGA cult members and likely religious zealots, these farmers should be familiar with the phrase, “you reap what you sow.”
Good news is there will be plenty of low cost corn to make popcorn!
– Texas factory activity continued to rise in April. > A very good sign indeed.
– The production index was largely unchanged at 5.1, a reading indicative of modest growth. > A very good sign indeed.
– The new orders index plummeted 20 points to -20.0. > Not sure on this one, but I would suggest that this is the moment the signal was realized to “Sit Tight” and see where it’s heading.
– The capacity utilization index edged down to -3.8. > Tails along behind, with the above information.
– the shipments index fell into negative territory for the first time this year. > Also tailing behind, given the above information on “Suggested Growth” from above.
– Labor market measures suggested a slight decrease in head counts and shorter workweeks this month. > Definitely warrants a “Short Term” decline in any work that will not be necessary, or business as usual, like for Major Parts disruptions, SCM Issues not easily or quickly rectified, Strikes Etc.
– The employment index held fairly steady at -3.9, with 9 percent of firms noting net hiring and 13 percent noting net layoffs. The hours worked index slipped to -6.4 from -2.9. > That’s to be expected and especially given the “Suggested Outlook” Perhaps other reasons getting tossed in at the same time, so a skew of sorts perhaps is amiss. Look’s coordinated to a degree anyway, but industries can be very similar in nature causing them all to be exposed, Perhaps?
>> This appears to me as a pretty good report, given what has been being reported on in the background, but from many without a clue, due to a simple lack of information. This is balanced, matched up, has a slight reaction drop, but a steady flow with even a slightly positive angle too. I am happy to see this.
Hey! Where can I get what you are smoking?
Officially nominated for the most delusional post award!
China opening up to the world for over 45 years. Many world class companies invested enthusiastically, gov supported, cheap labour, world embrace china manufacturing, trade flow smoothly, globalisation in full swing, China learned, built infrastructure and supply chain, produce world class STEM graduates more than whole Western world, etc, etc,etc. ie. over 45 years. MAGA wants manufacturing power house in a short period of time thru’ by force, by tariff, by sanction.
Ummmmmmmm
Can someone explain me the pathway to success ( manufacturing power house )?
You have to start to rebuild. Unfortunately, it will take more than a single presidential term. The current rate of change is far too fast. And yes, it will be difficult to restore something better than our current financially centric Potemkin economy. Ai will destroy the current structure regardless. If we fail to act, we will see far worse. Again, economic changes should be measured, not explosive.
Lula is less popular than Trump. If Lula Da Silva ousted in Oct 2026 the US, Canada, and Argentina can form the largest commodity cartel in the world, along with Ukraine and Greenland, that can dictate commodities price to China.
As the sage philosopher Don Meredith quipped to Howard Cosell, ““If ifs and buts were candy and nuts, we’d all have a merry Christmas.”
Howard Cosell was Jewish.
And yet the adage still rings true when responding to a hypothetical that will not most likely occur.
If u like gold u hate FDR who confiscated people’s gold. In order to compete with China we might revive the Monroe doctrine. It’s not hypothetical. It’s likely to happen after tomorrow election in Canada and Lula in Oct 2026. Are u against it. Are u so allergic to Trump it closed your mind.
FDR, 1.1 billion people, protected by two oceans, might be united together under Trump, instead of fighting each other.
It’s a new Monroe doctrine. From the north pole all the way to patagonia, the largest trading block in the world, which can compete with Shanghai cooperation org. One land mass protected by two oceans, with 0.7B people.
Such likely allies indeed. I bet the Canadians can’t wait to join forces with their reliable old friend Trump. Greenland and Ukraine I’m sure can’t wait put their trust in Trump given how he treats them. And of course, that’assuming Trump could get any deal done. A deal, not a photo opp.
A friend has a small manufacturing business in Dallas and imports all finished products from China. He has bought enough inventory for approximately 6 months of sales of his popular products through creative financing.
In his first attempts to price production locally, his costs would go up between 6x and 10x. This will close his business. He can only handle a doubling of cost and make a profit.
Hard core MAGA guy and he continues to state that the tariffs will not be a problem for him.
As an aside, he used to have 2 people in his shipping and fulfillment department. One of them has been eliminated due to slowing sales.
I also sold a high end cottage on the lake to a Dallas family last fall. Now they are talking about moving here and selling everything in Dallas because of crime and pollution. This family seems more politically agnostic and financially stable. They have many options.
Careful out there folks!
and while Trump dilly dallys around with is it Columbus Day or Indigenous Day: Jet by jet, US losing Pacific air superiority over ChinaChina rapidly building the fleet to deny US superiority in First Island chain and win a fast-hit Taiwan war https://asiatimes.com/2025/04/jet-by-jet-us-losing-pacific-air-superiority-over-china/#
If u want to trade with us stop bullying Taiwan.
But don’t worry too much. We have shown to backtrack on our threats within a week.
GDP down, SPX all time high. GDP up: all time high.
meanwhile General Motors is testing Kepler K2 humanoid robots at its Shanghai factory.China’s humanoid robot ‘Bumblebee’ turns into car mechanic in real-world testhttps://interestingengineering.com/innovation/china-kepler-humanoid-robot-shanghai-plant?group=test_a
Humanoid robots are a total gimmick. The same can be, and is done, by shapeless robots. Only thing they prove is that there can be intelligent life on two legs.
This is a bummer or hilarious depending on your POV.
Numbers show no mass deportation of migrants, despite Trump immigration crackdown
As the 100 day mark approaches, the Trump administration is not on pace to deport millions of immigrants as promised.
https://www.scrippsnews.com/politics/immigration/numbers-show-no-mass-deportation-of-migrants-despite-trump-immigration-crackdown#google_vignette
Deport the C-suite
… with a trebuchet.
Watch what they do, not what they say…
I don’t have either POV, as this is due to having issues being held up in Courts. Issues that occurred with other Administration’s, but neither side ever felt it necessary to move on any of them, well I suppose until Now…
Can we deport trump?
Our market cap would go up $10 trillion in a week and the taxes on the profits would be significant! Way better than continuing to allow this moron to destroy our relationships and disrupt the supply chain.
Any votes on where to send him?
Not holding my breath on the market finding fresh highs next month.
It may be a full century before we see the recent peak in market cap/gdp or P/E ratios.
If we do see the same ratios again soon, it’ll just mean a bigger crash.
The stock market now is like a train that’s derailed, but still in motion. It’s not going back on the tracks, there’s just a question of what the wreckage will look like.
“Any votes on where to send him?”
Hell if there was one, Russia would be my second choice. Third choice would be that penguin island Trump imposed a tariff on, sorry penguins I don’t really have anything against you, maybe you all could find a different island to occupy.
Im in the we’ve been overdue for a real recession for about 10 years camp. The job market in no way has been strong for going on 25 years now. America is living off low interest rates and cheap money and not productivity growth. The tax system incentives the FIRE economy and more globalization of labor. The system is so screwed up and most people don’t even realize it. Emerging markets continue to take work and jobs from western economies. This week Vance is negotiating a trade deal with India that gives them everything and gives us more bonded immigrant labor to prevent US citizens from getting jobs.
It’s actually a bit closer to a “Tariff Free” Deal for both Parties involved. Some prefer “Free Trade” but the outcome looks to be such, as reported thus far. A good thing!
I left india at 5 years old in 1978. Take one look at the country and tell me if you want anything from there. When the plague returns, it will be there first.
I have sources that say inroads are being made on finally stopping all visa programs.
I’m buying Spanish Electric Utilities, think they could be biggly by Christmas and the winter heating season..
Also looking at a time share in a Portugese Nuclear Power generation co-op..
Lots of things starting to shake out.
Not noticing much slowdown in my area. I notice traffic is down but the mall was more crowded this weekend than at anytime since the holidays. Again not much english heard at the mall. It must be laundered money.
Mall? Is Phoebe Cates still working there?
The vape stores do a tidy business when people are jittery.
Full recession by June.
can you let me know which year. I want to free up some cash just in case…
Good question. I will let you know when I do.
Note that orders are also down, hours are down, delivery times getting shorter and there’s slack capacity. Those are deflationary pressures.
Also, the big negatives were in expectations, not actuals. Actual production was up, and inventories held too. The big negatives were weakness in new orders and higher prices paid.
Will the CEOs choose to raise prices, take a hit on revenues (and begin layoffs) due to reduced sales, while trying to maintain profit margins?
Or will they restrain product prices, absorb some of they input cost increase, and accept a reduced profit margin for the sake of keeping revenues high and gaining market share as competitors fail?
So far it looks like some of both: In the Dallas Fed survey, Prices Received is positive, but not nearly as extreme as Prices Paid. Not all of the input cost inflation was pushed onto the next stage.
I’m long thrift stores.
In the meantime, wall street says buy, buy, buy the dip.
TINA 2 FOMO
Till not.
“For example, 54.6 percent of companies reported increasing prices for raw materials while 6.2 reported declining prices.”
We get PCE later this week and I am really curious about when inflation will show up and how the Fed will react. Trump wants lower rates but his actions are causing rates to forcibly go up. Oh the irony.
Everything’s bigger in Texas!
No PCE this week
One more key report tomorrow on imports and exports.
GDP on Wednesday
Consensus +0.2
GDPNow -0.4 with RFS -0.6
I need to see tomorrow’s import-export data to make a stab.
PCE will be out at 10 am ET today.