It may have been sunny in New York, where the previously reported regional Fed print soared and smashed expectations, but it looks like Philly had a few drizzles despite the name of the infamous TV show, as the just reported Philly Fed indicated a modest decline in the local index, which dipped from 16.6 to 15.4, but just above the 14.0 consensus estimate.What is worse, all the key components, New Orders, Shipments and Unfilled Orders all declined from April.
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Luckily, the few rainy days were few and far between: per the reports, "The index has remained positive for three consecutive months, following the weather?influenced negative reading in February. The new orders and current shipments indexes also remained positive but moved lower this month, decreasing 4 points and 9 points, respectively."
More:
Indicators suggest slightly improved labor market conditions this month. The employment index remained positive for the 11th consecutive month but increased only 1 point. The percentage of firms reporting increases in employment (19 percent) remained higher than the percentage reporting decreases (11 percent). The workweek index was also positive for the third consecutive month but edged 2 points lower.
Notably, both prices paid and received surged:
The prices received index, reflecting firms’ own final goods prices, increased notably, from 4.3 to 17.0. This is the highest reading since May 2011. Although the percent of firms that reported receiving higher prices (18 percent) exceeded the percentage reporting lower prices (1 percent), 79 percent of the firms reported steady prices. The prices paid index was also higher, increasing 12 points to 23.0, but followed three consecutive months of decline in the index.
Still, since paid is quite a bit higher than recieved for yet another month, companies will have to look elsewhere to boost margins.
And while the number of employees rose modestly from 6.9 to 7.8, this was at the expense of less work, as the average workweek declined from 5.0 to 2.9.
Finally, it may have rained in April, but when it comes to the forecast for October, respondents expect nothing but blue skies.
Most of the survey’s broad indicators of future growth showed improvement this month. The future general activity index increased 11 points, nearing its reading in March (see Chart). The future indexes for new orders and shipments showed parallel improvement, increasing 7 points and 6 points, respectively. The future employment index rose 8 points. The percentage of firms expecting growth in employment increased from 27 percent in April to 31 percent this month.
Something tells us this winter in Philly will be far gloomier than how what is expected now.