Dallas Fed Outlook Signals 22nd Straight Month Of Contraction

Dallas Fed's Manufacturing Outlook has now contracted for 22 consecutive months (the 2008/9 crisis collapse was 24 straight months) with a -1.5 print in October (missing expectations of +2). Production declined, Capacity Utilization tumbled, New Orders and Average Workweek contracted, and wages dropped (while prices paid rose).

"Not" a recession...

Chart: Bloomberg

Notably, expectations for business activity six months ahead dropped to 5 month lows. And respondents do not seem too enthusiastic...

...Job losses from the oil sector are having a negative effect on tax revenues in Texas. This puts pressure on government spending at the state and local level. High-paying manufacturing jobs are being replaced with lower-paying minimum wage service sector jobs. Unfunded pension liabilities of the city of Houston will further depress economic expansion as city budgets are affected.


...The global economies and U.S. economy are very weak and uncertain. We have had a lot of bid activity, but most schools, colleges, municipalities and commercial clients are postponing expansion until they see how the economy goes after the elections. The second and third quarters showed improvement over a weak first quarter, but the outlook for the fourth quarter is very soft. Additional staff reductions may be required.

...We are just bumping along in a low-growth environment. We are starting to hear that auto market may slow, but have not seen it yet in our order rates.


...We are very worried about six months from now. Not only is that a slow time period for us, but with the election not looking to be favorable for business climate in general, it gives me a very uneasy feeling.

But it's probably nothing.