The Dallas Fed Manufacturing Index came at -17.7, on expectations of -6.0 and compared to -13.5 previously. Needless to say this is a whopping miss. It was almost worse than the worst estimate in the series of economist predictions which came at -21. And of course, with the only thing left for decimated Texas-region manufacturers being hope, the General Business Activity six month ahead reading surged from -4.3 to 5.2. So what happens? Stocks completely ignore the actual data, which now virtually guarantees that a sub 50 ISM is coming any minute. But why should anyone care - after all only Brian Sack, the 18 PDs, and a few vacuum tubes are trading. So let em rip. Then again, no POMO today, so this could be the first Monday that the Fed is unable to close the DJIA green.

From the Dallas Fed, which somehow just barely mentions how much uglier the economy is becoming all the way in the third paragraph:

Texas factory activity rose slightly in September, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, edged back into positive territory following a reading near zero in August.

Other factory activity indicators also improved in September. The new orders and shipments indexes remained negative for the fourth month in a row but moved up from their August levels. The growth rate of orders index jumped from –13 to zero, suggesting the pace of incoming orders may be stabilizing. Meanwhile, the September capacity utilization index climbed back into positive territory, with the share of manufacturers reporting an increase rising from 22 to 28 percent.

Measures of general business conditions continued to worsen. The general business activity index pushed further negative this month, falling to –18. The company outlook index dipped back into negative territory, with 25 percent of firms reporting a worsened outlook, the highest share in more than a year.

Labor market indicators improved slightly in September. The employment index turned positive, up from a negative reading in August. Nineteen percent of respondents said they hired additional employees, while 17 percent noted layoffs. Hours worked were largely unchanged, while wages and benefits rose modestly.

Prices firmed this month. After doubling in August, the raw materials price index remained at 24 in September, with 31 percent of manufacturers reporting higher input prices. Finished goods prices stabilized, ending a three-month streak of declines. The future indexes for both raw materials prices and finished goods prices were positive and posted large increases over last month.

The six-month outlook improved in September. Most future indexes of manufacturing conditions rose this month after falling in August. The future indexes for production and new orders jumped up; nearly half of manufacturers expect increases in these indicators in coming months. The future general business activity index advanced from –4 to 5, and the future company outlook index rose as well, with 80 percent of firms anticipating flat or improved activity six months from now.

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Data were collected September 14–22, and 100 Texas manufacturers responded to the survey. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.

Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share of firms reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease.