Dallas Fed Survey Unexpectedly Drops: Respondents Warn "Biden Political Mentality" Means "Recession Being Planned For And Acted Upon"

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by Tyler Durden
Tuesday, Dec 27, 2022 - 04:00 PM

The headline Dallas Fed Manufacturing Survey disappointed in December, falling to -18.8 (from -14.4 and expected to rise very modestly to -13.5)

Interestingly the outlook for six-months ahead improved (but remains negative), but you wouldn't know it judging by the responses that The Dallas Fed decided to release for publication... notice a pattern?

Food Manufacturing

  • Business has picked up from a lull in October/November. We’re expecting a strong first quarter 2023.

  • Late-year seasonality affects our business. We generally see a slowdown from Thanksgiving through the end of the year.

  • The combination of increased costs of raw ingredients, illiquid consumers and the need to retain employees via increasing benefits has created a difficult environment. Couple that with the Biden political mentality of things, and it is unhealthy for business.

Paper Manufacturing

  • We’re now dialing in the very increased forecast of a significant downturn. Recession is now being planned for and acted upon.

Printing and Related Support Activities

  • We can feel things slowing down. Estimating activity is really down from previous months, and incoming orders have dropped off as well. It seems that our material vendors are getting items out faster, and all talk about how the activity level has slowed down from earlier in the year.

Nonmetallic Mineral Product Manufacturing

  • Our products are sold to homebuilders. [When] interest rates go up, home construction goes down and will continue to go down in the next six months.

Fabricated Metal Product Manufacturing

  • Demand is decreasing.

Machinery Manufacturing

  • I think we are experiencing a year-end lull in business activity. We actually have no idea what to expect for 2023.

  • We are seeing more and bigger orders recently. Oil companies are spending money on projects that they have held back on this past year. We expect 2023 to be a very good year. Our backlog of orders is growing to a record.

  • Never doubt the ability of the Federal Reserve to crush the economy when they intervene to stop inflation.

Computer and Electronic Product Manufacturing

  • We’re plowing ahead as our market changes.

  • We have seen a small decrease in new orders, but wages and other costs continue to increase. We are investing in more automation to reduce the labor cost.

Transportation Equipment Manufacturing

  • There is nothing positive in the economic outlook. The Federal Reserve should pause and let prior rate increases filter through before implementing further increases or they [will] overdo the contraction and make it harder to recover.

Miscellaneous Manufacturing

  • The rapid pace of wage growth is putting significant pressure on the business to outsource manufacturing outside the U.S.

Not exactly a picture of the 'strong as hell' economy we hear from The White House?