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Manufacturing activity and general business sentiment in the southwest smashed expectations, the Dallas Federal Reserve announced this morning.
The general business index surged to 15.3, topping analyst forecasts for a 1.5 reading, and above December’s -0.3.
Those expectations were steadily rising over the past several days, with the median target for the index increasing from zero on Friday, to 0.5 earlier this morning.
“Perceptions of broader economic conditions were notably more positive in January,” the Federal Reserve said in a statement. “Nearly a quarter of manufacturers noted improvement in the level of business activity, while nine percent noted a worsening. The company outlook index also increased markedly, rising from 5 to 13.5. Both indexes reached their highest readings in 10 months.”
The new orders sub-index jumped to a six month high, at 9.5, and reversed two months of negative readings.
Labor demand also increased in January, as employees saw workweeks grow longer as hiring trends perked up in the region. Twenty-one percent of firms polled by the Fed said they took on new workers, while nine percent said they initiated layoffs.
The eleventh district includes activity in Texas, northern Louisiana, and southern New Mexico. The Dallas Fed will next release manufacturing data on Feb. 27.