If the June Empire Fed index was a humiliating embarrassment to whoever collates the data, with only the headline number rising even as all index components plunged, and was merely released to baffle with BS some more before the FOMC meeting, today's Philly Fed release will surely shock anyone who believes the markets and the economy are still correlated. Printing at 12.5, this was a surge from May's -5.2, far above the -2.5 expected, the highest print since April 2011, and the biggest beat of expectations since October 2011. When "Baffle with BS" fails, just baffle with BS some more. Of course, keep in mind that while in previous months the plunging Philly Fed led to a bad news is good news outcome, today's big beat will merely reinforce the hawkish Ben view, and encourage yet another Taper Tantrum.
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The report summary:
[5]
And from the report [6]:
Indicators Suggest Improvement
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from -5.2 in May to 12.5, its highest reading since April 2011 (see Chart). The percentage of firms reporting increased activity this month (34 percent) was greater than the percentage reporting decreased activity (22 percent).
Other current indicators showed similar notable improvement this month. The demand for manufactured goods as measured by the current new orders index increased, from -7.9 to 16.6. The shipments index also moved back into positive territory, rising 13 points to 4.1.
Labor market conditions showed continued weakness, however, with indexes suggesting lower employment among the reporting manufacturers. Although it increased 3 points to -5.4, the employment index remained negative for the third consecutive month. The percentage of firms reporting employment decreases (20 percent) exceeded the percentage reporting increases (15 percent).
In brief, perfect timing: just in time to catch the Chinese crash.