Dallas Fed Survey: Fed Is Going ‘Too Crazy,’ Risking Millions of Jobs

Manufacturing declined again in Texas in November, the seventh straight monthly decrease in factory activity, data from the Federal Reserve Bank of Dallas showed Monday.

The Dallas Fed’s index for general business activity, derived from its monthly Texas Manufacturing Outlook survey, came in at minus 14.4. That’s an improvement from the prior month’s minus 19.4 but below the zero level dividing expansion and contraction.

The production index, a key measure of state manufacturing condition, nosedived from 6.0 in October to 0.8 in November, indicating that output barely grew at all in the month.

The index of new orders fell to minus 20.9 in November, the sixth straight negative reading. The growth rate of new orders fell to minus 19.9, indicating that the contraction in demand is accelerating.

Survey data across the country has been indicating a contraction in manufacturing but actual orders recorded in official government data keep rising. Last month, durable goods orders rose by a better-than-expected one percent, the Commerce Department said last week.

decreased to 0.8 from 6.0 the previous month, signaling little change in output from October.

The new orders index fell to minus 20.9 in November, its sixth consecutive negative reading, suggesting demand continued to weaken. The growth rate of orders index fell to minus 19.9, also signaling declining orders.

There was a bit of a silver lining. Inflation pressures eased back, although they remain well above historically normal levels. Both the index of raw materials and the index of finished goods declined, indicating that prices continue to rise but not as rapidly as earlier in the year.

The employment index dropped to 5.9, pointing to slower payroll growth. The hours worked index remained near zero, suggesting some easing in the very tight labor market.

“[The Federal Reserve] is going too crazy—that is really affecting the industrial equipment industry and stalling infrastructure spending as I have never seen before. Millions of jobs are at risk in manufacturing,” an executive from the Texas computer and electronic manufacturing sector said in the comments section of the Dallas Fed report.

“The outlook is troubling and unsettling,” a transportation equipment manufacturing executive said. “Caution is the strategy. The Federal Reserve is too aggressive. Let what’s been done materialize in the economy before piling on.”