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Philly Fed Beats; Prices Paid & "Hope" Spike Most In 5 Years

Tyler Durden's picture




 

The headlines are all about Philly Fed's rise to 9-month highs - just shy of the cycle's highs last September. Employment is up, and orders are improving... all good (buy, buy, buy)... But... the 'outlook' or hope index has exploded in the last 2 months by the most since 2009 rebounding from the winter doldrums. Perhaps most worrisome - though we are sure Yellen will dismiss it as "noise", Prices Paid are surging - up most in the last 2 months since June 2009. This is the biggest surge since the Fed started printing money... furthermore, prices received are down notably (ending the margin expansions dream).

 

"Noise"!

 

Full Breakdown...

 

Yellen has a problem...

The surveyed respondents indicated that price increases for purchased inputs were more widespread this month. The prices paid index increased 12 points and hasnow increased 24 points over the past two months. Over 36 percent of the firms re-ported higher input prices this month com-pared with 25 percent last month.

 

The prices received index, reflecting firms’ own final goods prices, however, declined from 17.0 to 14.1. The percent of firms reporting higher prices (22percent) exceeded the percentage reporting lower prices (8percent), but 71percent of the firms reported steady prices.

So "widespread" price increases and margin compression...

 

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Thu, 06/19/2014 - 10:14 | 4873463 Dr. Engali
Dr. Engali's picture

This is not the inflation old Yeller is looking for. Once wages start going up then she will panic. Plenty of unemployed and illegals out there to keep that from happening for a while. 

Thu, 06/19/2014 - 10:15 | 4873472 PartysOver
PartysOver's picture

Fiction I say, pure fiction.

Thu, 06/19/2014 - 10:17 | 4873480 fonzannoon
fonzannoon's picture

Luckily she is not looking for inflation.

Thu, 06/19/2014 - 10:33 | 4873553 NoDebt
NoDebt's picture

I believe DENIAL is a little closer to her state of mind on inflation.

Thu, 06/19/2014 - 10:48 | 4873640 Cathartes Aura
Cathartes Aura's picture

she's reciting her script'd part.

and is merely a few pages ahead of

everyone following her lead.

by now, most should know the ending.

Thu, 06/19/2014 - 10:52 | 4873661 Squid Viscous
Squid Viscous's picture

LOL, philadelphia what an epic shit-hole, i mean is there anything redeeming about that city, except for what happened there in 1775-1778?

Thu, 06/19/2014 - 10:22 | 4873501 alien-IQ
alien-IQ's picture

it's so very telling about who really rules this nation when the only "bad" inflation is "wage inflation".

When people have to pay more to buy their shit, that's good.

When people have to be paid more to afford their shit, that's bad.

It feels like a cynical joke.

Thu, 06/19/2014 - 10:23 | 4873506 fonzannoon
fonzannoon's picture

which is exactly why people having to pay more to buy their shit is deflationary.

Thu, 06/19/2014 - 10:32 | 4873544 NoDebt
NoDebt's picture

Yeah, because it deflates how much of that stuff they can buy.  Which is, of course, the meaning of the word "deflation" in the first place.  

My head just exploded.

Thu, 06/19/2014 - 10:14 | 4873465 NoDebt
NoDebt's picture

36% say prices paid (input costs) increased.  Only 21% said prices received (sale of finished goods) increased.  Get it?

Thu, 06/19/2014 - 10:41 | 4873601 pods
pods's picture

What are "things that make your asshole pucker," Alex?

pods

Thu, 06/19/2014 - 10:15 | 4873469 Space Animatoltipap
Space Animatoltipap's picture

Stagflation dead ahead.

Thu, 06/19/2014 - 10:35 | 4873568 NoDebt
NoDebt's picture

We got the 'stag' part covered for years now.  The inflation part hasn't been so bad because the 5% actual inflation has been reported as 2%.  So when inflation goes to 10% inflation they'll be working their asses off for new statistical ways to report it as only 3%.

Thu, 06/19/2014 - 10:43 | 4873619 kridkrid
kridkrid's picture

Two things that are happening right now, but we won't collectively recognize (or mess with the data so that "technically" we aren't in): 1) The early days of the GREATEST depression 2) World War III.

Thu, 06/19/2014 - 11:28 | 4873832 Squid Viscous
Squid Viscous's picture

"mustn't have that!" as David Irving might say...

Thu, 06/19/2014 - 10:19 | 4873492 khakuda
khakuda's picture

Great!  Good news AND bad news in one and since both cause the market to rise, this should cause it to rise exponentially.

Thu, 06/19/2014 - 10:20 | 4873493 alien-IQ
alien-IQ's picture

That fact that we measure "Hope" in economic reports is astounding and idiotic.

Hope is NOT a strategy. It's Sugar.

Thu, 06/19/2014 - 10:21 | 4873498 pods
pods's picture

You cannot put a price on hope.  Hope is all we are gonna have left eventually.

Oh, and unservicable debt.

pods

Thu, 06/19/2014 - 10:27 | 4873519 Dr. Engali
Dr. Engali's picture

"You cannot put a price on hope."

 

Sure you can. Obama cost us 7 trillion and counting. When we bought his predecessors we were only paying for the change. We had to pay extra for the hope.

Thu, 06/19/2014 - 10:37 | 4873579 pods
pods's picture

Yeah but Doc that 7 Trillion is going to be peanuts before this is over.  Shit, we have 120 Trillion in unfunded liabilities.  That is fancy talk for crawfishing on promises to all of us.  It ain't getting paid. No way in hell.

Throw in the small problem about oil and it comes into focus.

We are done.  No going back. Just stock up and live life as best as you can.

OT: I remember in the 90's (okay, they were a big foggy) all the talk about balancing budgets and paying off the national debt.  I still get a chuckle when I think about now.  If we did pay off the debt, what would replace that as our currency supply? 

pods

Thu, 06/19/2014 - 10:46 | 4873633 Dr. Engali
Dr. Engali's picture

Want to see something funny? Try explaining to a typical American how our 'money' is borrowed into existence and watch their brain fry right in front of your eyes.

Thu, 06/19/2014 - 10:26 | 4873522 PartysOver
PartysOver's picture

So....  World Cup!

Thu, 06/19/2014 - 10:24 | 4873513 madbraz
madbraz's picture

Philly Fed survey - companies included in this survey:

NY Fed

Philly Fed

Richmond Fed

San Fran Fed

KC Fed 

 

companies not included in this survey:   Dallas Fed (that Dick Fisher is not reliable source...)

Thu, 06/19/2014 - 10:24 | 4873516 Yen Cross
Yen Cross's picture

     This inflation is going to royally fuck corporate profits. Companies have already cut back labor to bare bones and commodity/energy prices keep skyrocketing. Their margins are getting squeezed like cheap Greek olives, and the equity market multiples continue to expand.

   But it's different this time...

 

Thu, 06/19/2014 - 10:34 | 4873565 NoWayJose
NoWayJose's picture

Inflation is NOT a good thing for corporations, especially as the we have seen the purchasing power of consumers decline.  In such a situation, the corporations get squeezed as it costs more to make and sell their products, but they discover that they cannot sell as many at the higher prices - and they also make less per item.  These numbers back that up.

Thu, 06/19/2014 - 10:39 | 4873573 MFL8240
MFL8240's picture

How is it possible that the Federal reserve report is the only positive report out there?  Retail sales down (malls empty), car sales down, mortgage applications and home sales down, commercial real estate space up, retail prices up and we are to believe that manufacturing is doing great? With prices up and wages down and 1/3 of the people out of work or on goverment subsidies, how is any of this positive? This sort of propoganda makes me sick!

Thu, 06/19/2014 - 10:48 | 4873637 the not so migh...
the not so mighty maximiza's picture

they lie so much, like they are afraid of something

Thu, 06/19/2014 - 11:04 | 4873726 Baby Eating Dingo22
Baby Eating Dingo22's picture

Bu..but.but...butt...butt...they tell me inflation is a good thang?

Thu, 06/19/2014 - 11:11 | 4873756 JenkinsLane
JenkinsLane's picture

The rise in hope is bullish for lottery ticket sales.

Thu, 06/19/2014 - 11:15 | 4873766 Yen Cross
Yen Cross's picture

    So let me get this straight. The markets are down because the macro news was good and that means the Fed. might speed up the QE drawdown again?

Thu, 06/19/2014 - 11:15 | 4873771 Colonel Klink
Colonel Klink's picture

Philly FED, there's the source that tells you it's a LIE.  FED = LIE

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