Looks like what my grandparents called an 'asp'. I have no idea what they are, I was always told not to touch them when I was little, and never did.
Supposedly they can sting, or maybe their hairs are irritants. I have no idea what they actually are, but I've seen their pupa stuck to brick houses before. Whatever it is, this is the larval stage. Probably some kind of moth.
I did! Thanks interweb. It's called a puss caterpillar. Here's some info I found:
"The puss caterpillar, or woolly slug, is the most poisonous caterpillar in the United States. Its poison is hidden in hollow spines among its hairs. This hairy caterpillar is found in the southern states, ranging west through most of Texas and north to Maryland and Missouri. It feeds on shade trees such as elm, oak, and sycamore. Puss caterpillars vary in size from 1.2 in.(32 mm) to 1.4 in.(36 mm)." from http://www.webmd.com/hw/health_guide_atoz/tm6502.asp
Good thing you never touched it! Yikes! Here's a video:
That is called an asp and their life cycle stays in the larval stage which you see in the video. Their hair is extremely painful when touched and cause burning, pussy blisters on the skin. Sucks really bad. I'd seen this video way back and already had it identified