Texas Factory Price Indexes Measure Breadth, Not Profit Margins

Texas Factory Price Indexes Measure Breadth, Not Profit Margins

The Dallas Fed's September Texas Manufacturing Outlook Survey put its raw-material prices index at 52.2 and its finished-goods prices index at 27.6. Both rose from August. The 24.6-point gap between them might look like a squeeze on factory profits. The survey did not measure that. Each index records the balance of firms reporting a price increase rather than a decrease, not the size of a price change or its effect on earnings.

The Dallas Fed published this September survey on Monday, 28 September 2026, using responses collected 15-23 September. Monday was the latest completed relevant U.S. options session when this article was prepared early Tuesday in Brisbane. No option quote, price move or market reaction was used to interpret the survey.

What the two numbers count

The September results table gives the response shares behind both current, month-over-month price indexes:

The Dallas Fed calculates each index by subtracting the decrease share from the increase share. The displayed cells reproduce its figures: 54.9 - 2.7 = 52.2 and 31.1 - 3.5 = 27.6. The no-change responses remain part of each survey question but do not enter that subtraction. The 24.6-point difference is author arithmetic between two response balances, not a published measure of profit margin.

If one firm's raw-material prices had risen 1% and another's 20%, both would count as increase responses. This is a hypothetical comparison; the survey table does not provide those magnitudes, the firms' purchase quantities, selling-price levels, product mix or costs beyond raw materials. It also does not match each firm's answer on one question to its answer on the other. The two aggregates therefore cannot establish whether any particular manufacturer's margin narrowed.

Keep the September vintage attached

The Dallas Fed says 63 of 113 Texas manufacturers surveyed responded. Their answers cover changes from the prior month; the Bank seasonally adjusts indexes as necessary. The September raw-material index rose from August's 44.1 to 52.2, while the finished-goods index rose from 22.7 to 27.6. Those changes describe a wider balance of respondents reporting increases, not 8.1% or 4.9% price inflation. The survey is regional and does not substitute for a national producer-price release or a company's financial statement.

The same September release reports a production index of 29.5, up from 16.1 in August. That is another response balance, not a 29.5% increase in factory output. Our Philadelphia Fed diffusion-index guide explains the single-index formula; the issue here is what can and cannot be inferred when two different price questions are compared. The PPI components guide covers a separate national dataset with a different population and measurement method.

What an options reader can carry forward

The survey supports a narrow observation: among responding Texas manufacturers, reports of higher raw-material prices were more widespread than reports of higher finished-goods prices in September. It does not supply an issuer's margin, an inflation rate for either group, an option's expected move, or evidence that a particular stock or option reacted. To examine an actual contract, a reader still needs its underlying, expiry, strike, live bid and ask, liquidity, settlement terms and account obligations. Our liquidity and bid-ask guide explains why a documented economic headline cannot replace an executable quote.

Options carry loss, liquidity, transaction-cost, exercise and assignment risks. FINRA's options guide explains the seller's obligations and potential for significant loss, and OCC's disclosure page points to the standardized-options risk document. Taxes and collateral requirements depend on the contract and account. Options Matrix Pro provides options-analysis tools; this article is general education, not personal financial, legal or tax advice or a recommendation to trade.

Sources and method

The dated Dallas Fed September report supplies the survey period, respondent count and headline comparisons. Its results table supplies the response shares and August/September index values. The Bank's survey methodology defines the balance indexes, and its release calendar lists the 28 September release. Cboe's U.S. options hours establish only the completed-session boundary. The two subtractions and the 24.6-point gap above are author arithmetic, not a market model. Preserve the September 2026 vintage and recheck the Dallas Fed record before using these numbers after a later release.