Dallas Fed September Manufacturing Activity Comes in at 9.8, Beating Expectations; New Orders Hit Highest in Nearly Five and a Half Years
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The Dallas Fed's September manufacturing activity index came in at 9.8, down from 11.6 in August but still above expectations. The key new orders component hit 30.7, its highest in nearly five and a half years since April 2021, supporting the overall index, while production reached 29.5, its highest since July 2021, and shipments hit 24.8, their highest since November 2021. Employment rose to 15.1, its highest since January 2023, while the outlook measure fell from 19.2 in August to 8.7, and the workweek slipped from 5.9 to 5.6. On the price front, raw materials prices hit 52.2, their highest since June 2022, and selling prices reached 27.6, their highest since June. The results, in line with the other four regional Fed surveys, provide fresh evidence that manufacturing activity remains solid despite rising input costs, and a strong September ISM manufacturing reading is expected. If that proves to be the case, it would set up a second consecutive rate hike at the October Federal Open Market Committee meeting and could further bolster the dollar.