Empire Fed Manufacturing has now missed expectations for 8 of the last 9 months. June's -1.98 print (against hopes for a post-weather bounce to 6.00 from 3.09) is the lowest since January 2013. With only 26% of respondents saying conditions had improved, New orders tumbled, Prices Received slid, shipments dropped and inventories fell... but employment and workweek increased? What hope for the future - less! General Business conditions 6-month ahead fell for the 2nd consecutiuve month with th emost crucial aspect being a total and utter collapse in future inventories from 3.13 to -17.31
The headline was the weakest since Jan 2013...-
[3]
And future optimism is waning...
The index for future general business conditions fell for a second consecutive month. The four-point drop, to 25.8, signaled that optimism about the six-month outlook ebbed further in June. The future new orders index fell eight points to 26.1, and the index for future shipments fell ten points to 22.1. The future inventories index plunged twenty points to -17.3, suggesting a widespread belief that inventory levels would decline in the months ahead. Indexes for future prices paid and received were little changed. The index for future employment declined for a third consecutive month but, at 13.5, it still suggested that manufacturers expected employment levels to rise. The capital expenditures index moved down four points to 11.5, and the technology spending index fell to -1.0.
And most critically...
The future inventories index plunged twenty points to -17.3, suggesting a widespread belief that inventory levels would decline in the months ahead
[4]
This the biggest crash in inventory optimism ever
This does not bode well for Q4 GDP!
Charts: Bloomberg
