Philly Fed Prints At 3.2, Modest Expectations Beat

After posting two consecutive negative prints, the most recent of which coming at -7.7, the July Philly Fed rose modestly to 3.2, just above consensus estimates of 2.0. Reading between the lines however confirms that there is nothing to write home about - from the report: "Responses to the Business Outlook Survey suggest that regional manufacturing activity remained weak in July. The survey’s indicators for activity and new orders, which had turned negative last month, recovered somewhat but are at very low positive readings. Firms indicated that employment grew modestly while the average workweek lessened. Indexes for prices show a continuing trend of moderating price pressures. The broadest indicator of future activity improved markedly this month,   rebounding from its lowest reading in 31 months in June." Among the key components of the index, those relating to corporate margins, the prices paid declined by 1.7 even as prices received declined by 3.3, once again confirming that economic margin reality and corporate ZIRP driven surreality refuse to match. And while number of employees increased from 4.1 to 8.9 the Average Employee Workweek plunged from 1.9 to -5.4. Just hire many people and have them all work 1 hour a day: sounds like the unions building the 2nd avenue subway. Nt surprising, inventories rose from -8.5 to 1.4. The survey conclusion: "The survey’s indicators suggested flat demand for manufactured goods this month, while shipments and employment grew only slightly. Price measures suggested continued moderation in price pressures. The broadest indicators for future activity rebounded after falling sharply last month and firms are somewhat more optimistic about their hiring plans over the next six months."



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