Last month was all ponies and unicorns as hope was extrapolated that a 19-month high in the Dallas Fed meant this time was different and not entirely cyclical as we have pointed out again and again [3]. Once again it seems the government-budget-based hope has collapsed as even optimism for the future dropped to its lowest in 4 months. This is the biggest miss of expectations on six months and the lowest print in 5 months. Reflecting the margin pressures that we discussed previously [4], prices received dropped dramatically as price paid soared.
and it appears margins will remain under pressure in the futures:
Looking ahead, 39 percent of respondents anticipate further increases in raw materials prices over the next six months, while 34 percent expect higher finished goods prices.