Texas Factory Activity Contracts Again as Production Slips — Dallas Fed

By Ed Frankl

Manufacturing-business activity in Texas contracted again this month, though a little less steeply than in August, as production fell back and uncertainty weighed on businesses.

The Texas Manufacturing Outlook Survey for current business activity edged up to minus 9.0 in September from minus 9.7 in August, the Federal Reserve Bank of Dallas said Monday.

The Dallas Fed conducts the monthly survey, which asks Texas business executives about conditions in the industrial sector. A reading below zero--where the index has been since April 2022--indicates a contraction in industry.

Meanwhile, the production index, a key measure of state manufacturing conditions, slipped to minus 3.2, from a positive reading of 1.6 in August, indicating a slight decline in output, it said.

Elsewhere, the gauge for outlook uncertainty spiked 9.8 points to 17.3, as political uncertainty remains high for businesses ahead of the presidential election.

The survey's index for new orders was largely unchanged, while for shipments it retreated into contractionary territory, according to the data. Labor-market measures suggested some employment growth but slightly shorter work weeks this month, with 20% of firms reporting net hiring and 17% noting net layoffs.

Upward pressure on prices and wages continued moderately in September, the Dallas Fed added, a signal of persistent inflationary issues even after the Federal Reserve cut rates by half a point earlier this month.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

September 30, 2024 11:03 ET (15:03 GMT)

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