Last month's Dallas Fed print at 3.8 barely beat expectations of 3.7 to stall a 3-month missed expectations slump as the data basically has flatlined for 4 months. However, it appears the lack of snow in Texas did not help (though the word weather appears 7 times in survey responses) as Feb's data missed expectations by the most in 4 months and slumped to a 9 month low. What is perhaps most concerning is the outlook for 6-months foward dropped dramatically (with 11 sub-indices tumbling) and CapEx also slumped to a 5 month low. Of course, US equities are surging to new highs on this dismal news...
The full table breakdown:
Buit wait, there's more - from the Dallas Fed PR respondents:
Word count of weather in respondents: 7. To wit:
- Our February business was affected by the weather
- The extreme weather throughout the U.S. impacted our ability to receive components needed in our manufacturing process. Weather also impacted revenue, as customers are unable to deploy products, resulting in increased inventory in the distribution channels and reduced requirements for manufacturing.
- Refinery activity slowed significantly due to the cold weather and the uncertain rhetoric coming from Washington and the EPA.
- Weather has been a significant near-term factor in our business. We estimate a 5 to 10 percent revenue impact in both January and February at this point. We expect the major construction boom along the Gulf Coast (associated with new lower cost gas and gas liquids supplies) to begin to favorably impact our business in the second half of 2014.
- We are getting information that the capital manufacturing businesses suffered a major slowdown due to the weather, transportation and materials problems.
- Consumer activity is very strong, despite the horrible winter. We manufacture discretionary consumer goods sold through retailers and distributors. Our three largest resellers report retail sales (of our products) up 12 percent, 29 percent and 11 percent, respectively. Our number two customer reports sales trending up 54 percent in February. Weather will determine momentum. A long, bitter winter will negatively impact the spring selling season. We shall see.
To summarize: the weather is to blame - those heavy Dallas and Houston snowfalls - as usual.
But what about the future? Shouldn't that be rosy?
- Expectations regarding future business conditions remained optimistic in February, although most indexes of future activity fell from their January levels
So more snowfall for Texas exected.
Source: Dallas Fed