Following January's bounce back from December's collapse to 2-year lows [3], Empire Fed fell back modestly in Feb. Against expectations of a small drop to 8.00 (from 9.95), it printed 7.78 - basically flat now for 2 years. Under the hood things are a lot more concerning as New Orders tumbled from 6.09 to 1.22 and number of employees slipped from 13.68 to 10.11. What is perhaps the most concerning for the ever-hopeful multiple expanding dreams of equity market wealth, future business expectations collapsed from 48.35 to 25.58 - the biggest drop since Jan 09 (along with a plunge in expected workweek from 11.58 to 1.22).
Empire Fed has gone nowhere in 2 years...
[4]
As "hope" collapse at its fastest pace since Jan 09...
[5]
Firms Less Optimistic
Indexes assessing the six-month outlook, though generally positive, conveyed considerably less optimism about future business activity than in recent months. The index for future general business conditions plunged twenty-three points to 25.6, its lowest level in more than two years. The future new orders and shipments indexes also posted significant declines. The future prices paid index fell several points to 27.0, and the future prices received index declined ten points to 5.6, its lowest level in more than five years. The index for expected number of employees, though lower, remained positive at 24.7. The capital expenditures index surged eighteen points to 32.6, its highest level in more than three years, and the technology spending index rose to 19.1.
Margin collapse
Empire Fed future prices received declined ten points to 5.6, its lowest level in more than five years
Charts: Bloomberg
