“I’m Worried…[About] Four More Years” – Dallas Fed Manufacturing Contracts For 24th Straight Month

The Dallas Fed Manufacturing Outlook survey has now been in contraction (below zero) every month since May 2022, falling modestly to -14.5 in April (worse than the -11.2 expected).

New Orders also remain negative (but did improve) and prices continue to rise (though at a slower pace). Labor market measures suggested flat employment and slightly shorter workweeks (hours worked index remained negative for a seventh month in a row) this month.

However, wit that said, wage pressure picked up dramatically this week to a seven-month high…

Source: Bloomberg

However, as always, we glean the most informative perspective from the respondents completed surveys where the pessimism shines through…

• The business and political environment is terrible.

• Business has not been this slow since COVID, and I’m worried.

• Consumer confidence for consumer goods has noticeably worsened.

• Customer orders have dropped. The indication is the economy is hurting spending in our area specifically. Customer uncertainty is worsening.

• I keep thinking we’ll hit bottom and either level out or turn up, but we keep pushing those hopes out a month, and another month, and another.

• There has been a decrease in new orders for three weeks now. Currently, we think this will come around, but we get more concerned as time goes on.

• Industrial manufacturing is showing signs of positivity due to the possibility of an interest rate decrease. Please do it. Manufacturing is really hurting.

High prices remain problem for many businesses:

• Inflationary pressures on raw materials and construction costs are driving up the cost of public projects. This is causing states to delay or scramble for funding for projects that have long lead times.

• Business is generally good, but we’re starting to see more customer resistance to prices. Our costs have increased dramatically over the last two years, and we have customers asking to hold prices to last year’s level, which we just can’t do. We continue to make capital investments to improve productivity and reduce unit labor cost.

And finally, many are fearful of another four years of Bidenomics:

• Political instability and politicization have hampered growth. We are entering stagflation.

• Fewer governmental regulations would lower our cost of doing business. An example is the 332 report, which we must fill out for the U.S. government; it has no value for us, just expense.

• Business is extremely slow, and we see no signs of improvement. We think it will stay slow until after the presidential election, after which, we will either have four more years of slow business or an improving economy.

Maybe that explains why even CNN was forced to admit the latest poll shows Biden  fading fast…

🚨 CNN POLL:

— President Trump leads Biden 49% to 43% in a two-way race.

— President Trump leads Biden 42% to 33% including third party candidates.

— 55% say the Trump presidency was a success. 39% say the Biden presidency is a success. pic.twitter.com/0Xn0j7oVia

— RNC Research (@RNCResearch) April 28, 2024