The Dallas Federal Reserve’s July Business Activity report came in with a huge disappointment this morning. The reading was all the way down at -13.2 for the month of July from 5.8 in June. The production component fell to 12.0 in July from 15.5 in June. Bloomberg had pegged the consensus estimate at +2.5 for July and the range from economists was put at -2.0 to 6.5 for the month.
This was not just a miss. It was a miss by a mile, and there were no tropical storms that could be blamed. The prior report showed that the Dallas Fed general business activity index in its Texas manufacturing survey rose to +5.8 in June from -5.1 the month before.
Today appears to have marked the lowest reading in 10 month,s despite the notion that orders and jobs expanded in the report. Maybe the gains in oil and gas infrastructure are just getting harder and harder to keep adding upon.
JON C. OGG
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