The Dallas Fed Manufacturing Survey came in well below expectations for September, tumbling back down from -12.9 to -17.2 (against expectations of a modest rebound to -9.0).

Under the hood the picture is even uglier with the six-month-ahead outlook plunging back near post-COVID lows and labor market signals (for jobs and wages) both making new cycle lows...

This is the 5th straight month below zero - signaling contraction - for the headline survey and one glimpse through the respondents' comments confirms things are not a rosy as the Biden administration - with its 'barely any inflation' and 'best economic growth ever' narrative...

• There is no optimism in the most positive outlook. Interest rate hikes will hit our industry hard. Poor federal polices and spending are just more economic “piling on.”

• We have seen a dramatic shift inconsumer behavior and it is impacting our volume. Beginning in May, demand forour premium products startedto wane as consumers shifted to less-expensivebrands. This has accelerated as fuel and other costs have risen.

• Sales have started to slow thissummer, as has our general outlook onbusiness over the short and long term.  Inflation and generaluncertainty seem high with customers; as a luxury product[producer], we expect sales to fall as customers cut discretionary spending.

• We continue to be very busy; however, it feels like things are starting to slow down some, and I believe we will be slower in the coming months than we have been. It is very hard to tell what inflation with rising interest rates will do for discretionary spending, which drives a lot of the products we make.

• We are beginning to see a slowdown in requests for bids on projects.

• Our order rate has decreased over the past month. We are only working four days on some of our equipment.

• We see the general economic situation worsening, but our customers are still buying because the oil industry is still making money and they see a bright future even though they will not talk about it. Therefore, we have hired a few new people to support the business that is coming over the next couple of months.

But the real punchlines:

• We are living in Alice in Wonderland ... it just gets worser and worser.

• There is a decline in optimism with regard to the business climate as well as our ability to stabilize it. The loss of domestic tranquility, the irresponsibility of governors and the Biden administration, and the loss of common defense and border security will have long-range and far-reaching consequences.

All pretty much guaranteeing a recession is here... and winter is coming.

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