Philly Fed Explodes To 33-Year Highs - A 10-Standard-Deviation Beat

Tyler Durden's picture

Against expectations of a 18.0 print, February's Philly Fed exploded higher to 43.3 - the highest since January 1984. This is a 10-standard-deviation beat, led by a surge in new orders and the workweek, despite a decline in 'hope' and the number of employees.

Everything is Awesome America... especially in Philapdelphia?

The index for current manufacturing activity in the region increased from a reading of 23.6 in January to 43.3 this month and has remained positive for seven consecutive months.

The share of firms reporting growth continues to increase: More than 48 percent of the firms reported increases in activity this month compared with 40 percent last month. The index for current new orders increased 12 points this month (with 44 percent of the firms reporting increases and just 6 percent reporting decreases).

 

For context, that is a 10-sigma event...

 

But 'hope' declined...

 

And as the full breakdown shows, the number of employees declined, as did inventories and prices received.

Unfilled Orders, Delivery Times, Priced Paid were all largely unchanged.

Is this as good as it gets?

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PUNCHY's picture

In reply, yes. As long as the Russians didn't do it of course.

buzzsaw99's picture

i don't want to hear any hedge fund maggot bitchez whining if they miss the (-0.20%) dip this a.m..

btfd at the open, sell the close. a cave man could do it.

rrrr's picture

Might be nice for newbies if you would state what specifically these charts represent, you know, like, "the green bars represent the number of used diapers discarded in parking lots, while the red bars represent the number of used diapers still on babies," or something like that.

cowdiddly's picture

I just keep it simple. a 10sig beat odds means somewhere in the universe another Big Bang event went off.

Or as Carl Sagan would say, "Billyuns and billyuns of shitty diapers"

 

Dr. Venkman's picture

These days all you need to know:

Color: Green

Chart: up and to the right.

PUNCHY's picture

Or, the greatest number of dumped diapers since Lehman. Didn't see that one, did you?

NotApplicable's picture

Why the charts represent fiction massaged within the bowels of statistics.

Survey Says!

allinwood's picture

The Donald making philly beef great again

Don Pancho's picture

Lol...i know there is less chocolate in this pack, but that is more, and i like it...

spastic_colon's picture

and it costs the same....how do it know?

spastic_colon's picture

better change the dot plot and rate expectations to 23 increases for 2017

hardmedicine's picture

I only wish i knew what it all meant!!!!~!~!~!~!

 

just a bunch of dashes because mymajor was in biochemistry... wish i had an MBA

 

Iconoclast's picture

That is one helluva rise, that added to the new building permits suggests we all need to get long on Kool Aid.

GRDguy's picture

Philly's just being silly. (Fake math --> fake news)

hotrod's picture

Trump has done it, yet done nothing. Absolutely amazing. 

RAISE THE RATES, RAISE THE RATES

TaaDaa's picture

All that really matters is the move in the markets.

 

These guys continue to nail market action. Nailed TRUMP win asnd Trump rally. CHECK OUT THE CHARTS ON GOLD!!  FLAWLESS!!

 

Check these gold and index charts.  There are some analysts who actually make correct calls in gold and in the indexes.

 

 

 

Too many people are guessing what the markets will do and are calling themselves analysts. Nice to see there are some real analysts out there.

 

 

 

The group of analysts who split off from Goldman about 30 years ago have been nailing markets. 

 

 

Their charts on one of their FB pages contains past charts that prove their correctness with market calls.

 

 

https://t.co/f3mU9N8rc4         is the link I got for their charts.  Good stuff

Arnold's picture

The retirement home called for you.

Your Sh--wave has been missing for a couple of days.

restelle's picture

Of course 33, screw you.

BigFatUglyBubble's picture

Yup.  Setting us/Trump up to pull the rug out from under us.

LawsofPhysics's picture

Just wait until hyperinflation hits.  A monetary "correction" is coming whether we all like it or not.

same as it ever was...

1stepcloser's picture

Make statistics great again! 

SummerSausage's picture

Investment and growth have been supressed for 8 years.  It's not a surprise that there is a blow off in planning and optimism now that we have an intelligent president and not a self absorbed banana republic mush head dressed up like a man with an IQ.

LawsofPhysics's picture

Growth?  In what exactly? Financial "products"?  Yeah, how did that work out for everyone last time?

gatorengineer's picture

Trump better look at some of these cooked numbers because its all being set up to come down around his ears....

poland spring's picture

PHILADELPHIA IS BOOMING!

Yes we got some problems like any other city; however, skyscrapers are being built everywhere.  Condos, new housing construction is everywhere.

Restaurants are packed.  Not sure where the money is coming from, but there is money because I see it and see people spending.

I just save, but there are opportunities galore here.  Check any company site and they are hiring (like indeed.com/linkedin/dice.com).

Contractors get paid decent money and lots of contracting firms here hiring all kinds of analysts.

Philly does have the soda tax, but I don't buy soda so it doesn't bother me. City sales tax is 8% but I mostly buy online except for groceries.

Wide variety of food, styles, culture.  Again, does have a lot of ratchedness, lots. Well developed public transportation system (although the people riding them aren't so desirable).

The average price of a  typical working class 3 bdrm, 1 bath (1000-1300 sq ft) rowhome in Philly is about $100-$150k.

This city has lots of major hospitals, 5 major universities. 3 major sports teams.  Its a lot better now than it was during the 90s.

dweller's picture

It really doesn't make any sense to me what is happening in Philly? What are the major industries moving in to warrant such a boom in housing and commercial building?  Is it really just a bunch of small firms hiring analysts responsible for this?

There's no question the greater center city area, which goes from Girard to Washington Ave, river to river, PLUS university city is getting a population influx. Greater Center City plus UCity is getting about 15K new persons per year... not a major increase in population, but much beter than the major decline of the city seen in the 70s through mid 90s.

I have a few theories for the growth. One is the 10 year tax abatement on new construction. These developers are literally putting up boxes of shiite. Greater than 50% of the new construction i see is pure garbage, and the yuppies, hipsters, and millennials moving in are eating them up. Areas like Northern Liberties, which were war zones in the 90s and you could get a house for $200K, are now selling new construction at $650-800K.  The cost to the builder MIGHT be $300K each for these, so they are making a killing off new mortgage debt. Philadelphia used to have extremely low household debt but with the new generation of millennials moving in they are really saddling themselves with debt. The 10 year tax abatement pulls forward the future value of the house to the developer, inflating the sales price. When the 10 year tax abatement runs out in 5-10 years (depending when built during this boom), watch out. They will get hit with a $10K plus tax bill per year plus what if interest rates are 6% instead of 3.75 or 4% I personally think this is a bubble in the making. However, with New Jersey property tax and Lower Merion increasing property taxes, the bubble may not actually burst for tax reasons as the suburbs are becoming more and more unattractive due to the extremely high taxes, cost of  maintenance, and commute.

The other thing I see happening are these yuppies and millennnials making very poor decision where they are buying. I see new construction going for $400K in EAST KENSINGTON of all places. I looked at one of these at an open house. I looked out the window and all there was were vacant lots, trash, and druggies right in front of the house all dipped out on H. This is a neighborhood which still has a long way to go.. no infrastructure, no amenities unless you walk all the way to  Fishtown / Frankford ave corridor, no opportunity to send kids to school, and just a general trash pit. yet they still pay the money for these crumby houses. It's completely insane. I think people have lost their minds, and the McCann/ Somers Team is doing a real good job of conning people into buying this shiite.

Philly still extends far beyond greater Center City/ South/East Kensington / South Philly.  There are entire areas of NE Philly, about the size of Pittsburgh, that has moved from middle to middle/lower class according to latest census. These are huge areas like Frankford/Lawncrest/Oxford Circle, etc that nobody talks about. SW Philly is as bad as it ever was. W of 52nd st and the area to the West of the zoo is still bad.  Area immediately around Temple has gotten better, but move a little further away to Olney, Strawberry Mansion, West Oak Lane, Germantown, etc, and it's still a warzone. Overall poverty is still at pretty close to all time highs in the city. It's just the old middle class outclaves of the city in the middle and outer perimiters are gone, replaced 50% with more low income and 50% with higher earners living in Greater Center City. If you want to see the separation of the classes, theres no better place than Philly to see this.

I do agree however, the restaurant scene is great here. Lots of different groups of people depending on your liking. There's even a gun range in the city and an active population which enjoys responsible use of firearms.

Septa is still a toilet, but the hipsters and millennials tolerate it.

I would disagree about the 3 bedroom 1000-1300 square foot house. $100 to $150K puts you in a bad area. You have to spend about $250K on such a house to get into a decent, transitional or working class area. Examples are Newbold, South Kensington, Port Richmond, Lower Moyamessing.

 

 

TeethVillage88s's picture

We are ALL Boiling frogs.

I appreciate the info and narrative you put forth, however I heard on X22Report that often the ads or announcements of job openings is gamed and that few people are hired if any... also if you want foreign worker VISAs it is a strategy to prove US Workers are unskilled and STEM or skilled workers from outside are required.

A small house or mortgage here in a small town will cost $18,000 a year for maintenance, utilities, property taxes, insurance, mandatory telephone. I think I figure $16 per SQ FT is a starting place.

Clearly the Federal Reserve does not manage Money Velocity except to drive down the labor rate and ignore the growing gaps in wealth and compensation between the middle class and the wealthy. Money Velocity and Current Account Deficit in Trade used to be corner stones of any Economic Policy/Strategy.

So yes, Trump is correct... we have destroyed the middle Class and our most valuable manufacturing velocity... for an Economy where big international Manufacturing and Importers score 'out-sized gains'... and open borders drives down labor rates... while we see new kinds of taxes each year... like 'Soda Sugar Tax'.

The Wealthy Class and Corporate Class have won... even I say we should lower taxes for corporations... maybe my brain is fried too?

http://www.zerohedge.com/news/2014-03-25/list-97-taxes-americans-pay-eve...

Foreign Owned Assets
Here is a look at Exponential Growth (2004-2008) of Foreign Owned Assets in the USA from the Department of Commerce.
http://www.bea.gov/newsreleases/international/intinv/iip_glance.htm ($31 Trillion foreign compared to $26 for US) (This is very interesting as Big Banks are growing strongly, but the number of total us banks is dramatically decreasing, like someone is gaming the system, Commercial Banks in the U.S. - FRED - St. Louis Fed)

http://research.stlouisfed.org/fred2/series/ROWFDN... ($3.16 Foreign Investment USA)
http://research.stlouisfed.org/fred2/series/GPDI ($2.69 Private Domestic Investment)

And foreigners own $6 Trillion in US Treasuries.

Looks like 1981 was the Money Velocity high, note manufacturing plunged 1979.

http://research.stlouisfed.org/fred2/series/M1V (Top was 2007 Q4 at 10.7, now down to 6.3)
http://research.stlouisfed.org/fred2/series/M2V (Top was 1997 Q3 at 2.2, now down to 1.5)
http://research.stlouisfed.org/fred2/series/MZMV (Top was 1981 Q1 at 3.5, now down to 1.4)
http://research.stlouisfed.org/fred2/series/Mult (Top was January 1987 at 3.1, now down to .7)

http://research.stlouisfed.org/fred2/series/MANEMP (Employees: Manufacturing 12.1 M Persons)

Trade Deficit is from $500 Billion Annual to what the Economist called $700 Billion Annual.

Perhaps $1 Quadrillion in US denominated Assets are waiting to return to the USA and cause inflation?.

adr's picture

Well when you only have around three manufacturers left in an area, all you need is one to get a decent order to have a 10 sigma or more event.

These Fed surveys can't be taken seriously anymore. There's so much bullshit that reality is impossible to see.