Philly Fed Comes At -0.7, Misses Expectations Of 0.5, Prior At -7.7, Stock Trading Computers Momentarily Stunned
The Philly Fed has just reconfirmed a contraction, following last month's -7.7 plunge, now coming at -0.7 on expectations of 0.5. Let the spin begin. In the meantime, here are the facts: The New Orders index at the lowest level since June 2009, Prices Paid lowest since August 2009, and from the report "For the second consecutive month, firms reported a decline in both new orders and shipments. Employment levels remained steady this month, but firms reported declines in average work hours. The survey’s broad indicators of future activity continue to suggest that the region’s manufacturing executives expect growth in business over the next six months, but optimism remains below levels earlier in the year."
Indicators Suggest Growth Stalled At End of Summer
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of ?7.7 in August to ?0.7 in September. The index, which has been negative for two consecutive months, suggests that growth has stalled over the last two months (see Chart). Indexes for new orders and shipments continued to indicate weakness this month: The new orders index fell 1point, remaining negative for the third consecutive month, and the shipments index decreased 3 points, remaining negative for the second consecutive month. Firms reported declines in inventories and unfilled orders and shorter delivery times.
Among the index components:
- New Orders: -8.1 vs. Prev. -7.1
- Prices Paid: 9.8 vs. Prev. 11.8
- Employment: 1.8 vs. Prev. -2.7