Who could have seen this coming? Well apparently all but one economist (TD Securties Greene and Mulraine had a -5.0 est) as the -4.4 print is almost a 4 standard deviation miss from extrapolator's and hockey-stickers' dreams. Following December's drop and miss, the Dallas Fed Manufacturing index is now at its lowest since May 2013. All components dropped, apart from inventories as 11% of firms reported layoffs and wage pressures eased.
as New Orders collapse...
Some of the details are extremely worrisome...
The shipments index plunged from 20.8 to 6, due to a much higher share of respondents noting a decline in shipments in January than in December
Wage pressures eased, while input and selling prices declined in January. The raw materials price index came in at -1.7, its first negative reading in more than five years.
The finished goods price index fell 11 points to -6.7, after posting positive readings during the past 17 months.
Looking ahead, 29 percent of respondents anticipate increases in raw materials prices over the next six months, while 19 percent expect declines.
The wages and benefits index receded from 25.2 to 19.1, suggesting some moderation in upward pressure on compensation costs.
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