Dallas Fed October manufacturing index -19.4 vs -17.2 prior

• Prior was -17.2
• Employment 17.1 vs 15.0 last month
• Hours worked -0.1 from 8.0 last month
• New orders -8.8 from -6.4 last month
• Production 6.0 vs 9.3 last month
• Raw material price paid 32.0 vs 37.1 last month
• Prices received 22.2 vs 18.1 last month month
• Shipments -1.6 vs 7.1 last month
• Growth rate of new orders -13.2 vs -1.7 last month
• Finished goods inventories vs 3.3 last month
• Wages and benefits 36.7 vs 36.6 last month
• Capital expenditures 7.1 vs 13.6 last month

Much of this survey is built around the oil and gas industry, which isn’t exactly running along the same lines as the rest of the economy.

Selected comments in the report from non-energy companies:

The outlook has dimmed slightly. Some raw material costs have decreased, while others continue to increase or stay the same (higher level). Some customers are quietly cutting back on orders. We are in the food business, so the change is subtle

As a contract manufacturer for many different sectors, we see that home goods sales such as mattress subcomponents and comforters and pillows have consistently dropped and are half of what they were this time last year.

We have been anticipating (and experiencing) a decline in business for several months now. The rate increases are starting to go too far.

Inflation
Inflation

Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply in relation to the wealth produced (measured with GDP). As such, this generates pressure of demand on a supply that does not increase at the same rate. The consumer price index then increases, generating inflation.How Does Inflation Affect Forex?The level of inflation has a direct impact on the exchange rate between two currencies on several levels.This includes purchasing power parity, which attempts to compare different purchasing powers of each country according to the general price level. In doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.

Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply in relation to the wealth produced (measured with GDP). As such, this generates pressure of demand on a supply that does not increase at the same rate. The consumer price index then increases, generating inflation.How Does Inflation Affect Forex?The level of inflation has a direct impact on the exchange rate between two currencies on several levels.This includes purchasing power parity, which attempts to compare different purchasing powers of each country according to the general price level. In doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.
Read this Term in raw material costs continues to be a drag on our profitability. We are unable to pass these costs on to our customers.