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"!
[4]
Full Breakdown...
[5]
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...
