On the heels of Empire Fed's big plunge, Philly Fed just collapsed. Despite employment and new orders picking up, the headline Philly Fed data crashed from 8.3 to -6.0 (missing expectations of +5.9 by the most in 4 years). This is the lowest print since March 2013 and is blamed on markets "evidence suggests that the responses regarding general activity that were received earlier in the month may have been negatively affected by the volatility in the stock market and international news reports." Must. Keep. Stocks. High.
The Breakdown has some silver linings...
As The Philly Fed notes,
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 8.3 in August to -6.0 this month. This is the first negative reading in the index since February 2014 (see Chart). However, the demand for manufactured goods, as measured by the survey’s current new orders index, showed continued growth: The diffusion index increased from 5.8 to 9.4. Firms reported that shipments also continued to rise. The current shipments index remained positive but fell 2 points, to 14.8.
Firms’ responses suggest some improvement in employment conditions in September despite the reported lull in overall activity. The percentage of firms reporting an increase in employees in September (21 percent) was higher than the percentage reporting a decrease (11 percent). The current employment index increased 5 points, its highest reading in five months. Firms also reported, on balance, a modest increase in the workweek similar to August.