Despite a modest bounce in Philly Fed headline data – thanks purely to a jump in 'hope' from 33.7 to 45.8 (the highest in 18 months) – the underlying components of the Philly fed survey are a disaster. New orders collapsed, employment crashed to 7 year lows, Average workweek plunged, prices paid soared, and inventories fell.
6 of the 9 indicators fell…
But hope soared to 18 month highs…
Optimism is all they have left…
The August Manufacturing Business Outlook Survey indicated, on balance, that growth in the region’s manufacturing sector is currently weak. The survey’s indicators for current general activity and shipments were positive, while the indicators for new orders and employment were negative. The indicators for future conditions rose sharply from last month’s readings, however…
The current new orders index dropped significantly from a reading of 11.8 in July to -7.2 in August. The percentage of firms reporting an increase in new orders (27 percent) was less than 1 point lower than last month; however, the percentage of firms reporting a decrease (34 percent) was 18 points higher than last month. The current shipments index rose slightly, from 6.3 to 8.4. The percentage of firms reporting an increase in shipments (35 percent) was 6 points higher than last month. The indexes for unfilled orders and delivery times fell into negative territory, recording values of -15.0 and -3.8, respectively. The index for inventories dropped from -4.3 to -9.2. The indicators for unfilled orders, delivery times, and inventories have been negative for most of this year.
The survey’s indicators of employment weakened considerably. The employment index fell 18 points to -20.0, which is its largest negative reading for the current year. Although 67 percent of the firms reported no change in employment this month, the percentage reporting decreases (25 percent) significantly exceeded the percentage reporting increases (5 percent). The workweek index also fell, from -3.6 to -11.5. Twenty-five percent of the firms reported a decrease in average work hours, and only 13 percent reported an increase.
And finally, initial jobless claims are hovering at 43 year lows…
Charts: Bloomberg
via http://ift.tt/2b3K4H5 Tyler Durden