Empire Fed Mysteriously Rises Even As All Components Deteriorate

Tyler Durden's picture

Over the past year we have seen numerous occasions where regional Fed diffusion indexes posted a headline rebound despite all their components deteriorating. Today was one such day, when moments ago the NY Fed released the Empire State Mfg Survey, which "somehow" rose from -4.21 to -1.99 (it still missed expectations of a -1.00 print). We say somehow because the "rise" happened even as every component in the index declined, to wit:

  • New orders fell to -7.45 vs 1.04
  • Shipments tumbled to -9.38 from 9.01
  • Unfilled Orders fell to -11.61 from -9.28
  • Delivery time fell to -4.12 from -6.25
  • Inventory fell to -12.5 vs -4.12
  • Number of employees fell to -14.29 vs -1.03
  • Work hours fell to -11.61 vs 2.06
  • Prices received fell to 1.79 from 2.06

There was just one component which rose - the one which should fall, namely prices paid, which rose from 15.46 to 16.96, and since this is the one component which cuts into profits (as prices received declined),  one can summarize that effectively every single component in the Empire Fed declined. And yet, the headline index rose.

At least the Empire Fed narrative did not try to spin the situation, admitting that "Business Conditions Remain Weak"

Echoing their August assessment, manufacturing firms in New York State reported a slight decline in business activity in September. The general business conditions index inched up two points, but remained negative at -2.0. Twenty-two percent of respondents reported that conditions had improved over the month, while 24 percent reported that conditions had worsened. The new orders index fell eight points to -7.5, indicating that orders dropped, and the shipments index tumbled eighteen points to -9.4, pointing to a pronounced reduction in shipments. The unfilled orders index slipped to -11.6. The  delivery time index fell to -6.3, signaling shorter delivery times. The inventories index moved down eight points to -12.5, indicating that inventory levels declined at a faster pace than in August.

Worse, the Labor Market Deteriorated: The employment index fell thirteen points to -14.3, indicating that employment levels contracted. The average workweek index posted a similar decline, falling fourteen  points to -11.6—a sign of retrenchment in hours worked. Both of these indexes reached their lowest levels of 2016. The prices paid index was little changed at 17.0, indicating that input prices  continued to rise at a moderate pace, and the prices received index held steady at 1.8, signaling that selling prices edged slightly higher.

The good news is that propaganda machine still works, and as the Empire Fed notes, "Outlook Remains Optimistic."

Indexes for the six-month outlook suggested that respondents were more optimistic about future conditions than they were last month. The index for future business conditions climbed eleven points to 34.5. The index for future new orders advanced to a similar level, while the index for future shipments, though positive, declined. The index for future employment moved up into positive territory, suggesting that firms expected to expand employment in the months ahead. Indexes for future prices rose considerably, suggesting that firms expected both input prices and selling prices to increase more significantly over the next six months. The capital expenditures and technology spending indexes both climbed to 10.7.

And why not: in a world in which the sumtotal of all components rises even as every single component deteriorates, one can certainly be optimistic that pretty much anything can happen.

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eclectic syncretist's picture

Instead of adding the negatives they must have multiplied them. Ironic, no?

VinceFostersGhost's picture

 

 

Please making all the stocks go up now.

cheech_wizard's picture

As long as their are an even number of negatives being multiplied - bingo positive result...

Standard Disclaimer: At least that's how math used to work before common core.

asteroids's picture

Your Jedi mind tricks won't work on me!

E.F. Mutton's picture

Another record Ukranian Wheat Harvest, eh Comrades?

VinceFostersGhost's picture

 

 

It was so good....we had to stand in line for bread.

 

Got some Venezuelan eggs......$150 bucks......how many can I put you down for?

Rich Stoehner's picture

Thats about what organic eggs at Whole Foods cost.

Iconoclast421's picture
  • "Delivery time fell to -4.12 from -6.25"

There you go. That is a rise not a fall. Apparently delivery times account for 83% of the weight of the index!

Serfs Up's picture

Came here to say that.  Leaving satisfied.

SomethingSomethingDarkSide's picture

They can't decide what kind of information will make The Plebs scurry off to the ATM and buy!

GUS100CORRINA's picture

EMPIRE FED DATA FROM THE PIT OF "HELL". 

JUST DEPRESSING THAT NO ONE TELLS THE TRUTH ANYMORE. WE HAVE EVEN CHANGED THE LAWS OF MATHEMATICS: To Wit: -1+-1 = 2. It must be that new math program where everything is positive!!!! I BELIEVE THAT THE NEW MATH PROGRAM IS CALLED "COMMON CORE".

So we see that justice is turned back, And righteousness stands afar off; For truth is fallen in the street, And equity cannot enter. So truth fails, And he [who] departs from evil makes himself a prey. Then the LORD saw [it], and it displeased Him That [there was] no justice.

Bill of Rights's picture

Must keep gold from rising at all costs!

Omen IV's picture

so as the Baghdad Bob approach to every Government Report  takes over all metrics - there must be private sources for alternative data that become the believable  gold standard to overcome the nonsense.

 

what is the source?

Claire Voyant's picture

Simple goberment maff
negative X negative = positive

The more negatives the greater the positive result.

Q.E.D.

bada boom's picture

People and businesses have been leaving the 'Empire' state since long ago.

vote_libertarian_party's picture

It's a Festivus miracle!!!

 

Add 10 negative numbers = a positive number

We Are The Priests's picture

It is, in fact, "A Festivus for the Rest of Us."

Infield_Fly's picture
Infield_Fly (not verified) Sep 15, 2016 9:42 AM

Andrew Cuomo - Governor or New York

 

FIX THIS SHIT YA USELESS FUCK!!!!

nakki's picture

Its the Lenny Dykstra P&L method that's being used. You take all the losses (negative numbers) out of the equation and only count the winners (positive one) and presto change-o , everything is awesomer.

NEOSERF's picture

In a world where bad is good, how is this not optimistic.  And further, if you own or run a business, you have to have built in optimism as you rely on it to put food on the table.  The survey should survey your suppliers and whether THEY view your business optimistically based on recent and future order levels.

SimplePrinciple's picture

Falling inventories are, in fact, a positive indicator of business conditions.  That is, unless you can't get the stuff off the bankrupt ships.