Texas factory orders jumped sixteen points in August, and the survey's employment index went the other way

Sixteen points. That is how far the new orders index moved in a single month.

The Federal Reserve Bank of Dallas published its August Texas Manufacturing Outlook Survey on Monday morning, and new orders came in at 22.0 against 6.4 in July, a rise of 15.6 points and the largest move anywhere in the release. The production index, which the bank treats as its main measure of state factory conditions, rose six points to 16.1. Capacity utilization rose to 12.8 from 5.9 and shipments rose to 14.1 from 8.8. General business activity, the broadest question the survey asks, went from 1.3 to 11.6 against a series average of 0.2.

Hiring did not follow

The employment index fell 4.2 points to 8.0. Hours worked edged up to 5.9 and capital expenditures fell 4.0 points to 8.2, so of the measures that describe what a firm commits money to, two fell and one barely moved while orders and output climbed. Wages and benefits fell 9.7 points to 21.1, which lands exactly on the long run average for that series.

Orders surged. Payrolls did not.

Costs are still running ahead of prices

Prices paid for raw materials rose 2.8 points to 44.1, against a series average of 27.9, and that index has now been positive for 76 consecutive months. Prices received for finished goods fell 2.9 points to 22.7. So input costs rose across a wider share of firms while the prices those firms charge rose across a narrower one, and the distance between the two grew.

The forward answers say the firms expect that distance to hold. Future prices paid rose 8.0 points to 53.5 and future prices received rose 6.5 points to 40.9.

The six month answers

Future production rose 6.3 points to 40.9 and future general business activity rose 10.7 points to 37.2. Future new orders rose 13.2 points to 42.4, future shipments rose 14.9 points to 45.2, and future employment rose 14.4 points to 34.5 against a current employment reading of 8.0. Capital expenditure intentions were the one line that did not move at all, unchanged at 25.9.

Outlook uncertainty rose 2.3 points to 8.7. Its series average is 16.7, so by the survey's own history the firms answering are less unsure than usual, not more.

The release rests on 69 replies from the 112 Texas manufacturers contacted, collected between August 18 and August 26. Each index is the share reporting an increase minus the share reporting a decrease, so the 22.0 on new orders describes breadth rather than size: 44.0 percent of respondents said orders rose, 33.9 percent said they were unchanged, and 22.0 percent said they fell. The next release is September 28.