Despite Two Thirds Of Components Declining, Empire Fed Prints At Highest Since June 2010

Chalk this one to "seasonal adjustments" or something, cause we no longer have any clue what is going on with the data fudging in America. When it comes to banana republic economic indicators the US is rapidly eclipsing China - case in point the Empire State Manufacturing Survey, which despite seeing the majority, or 6 out of 9 sub indices, declining in February, managed to not only rise, but beat the highest Wall Street estimate, printing at 19.53, the highest since June 2010, on expectations of 15.00, and compared to a previous print of 13.48. What lead to this epic surge? Why nothing short of a decline in just about two thirds of the components: New Orders declined from 21.69 to 22.79, Unfilled Orders declined from -5.49 to -7.06; Inventories declined from 6.59 to -4.71, Prices Paid declined from 26.37 to 25.88; Prices received declined from 23.08 to 15.29, and Number of Employees declined from 12.09 to 11.76. What increased? Shipments, Average Employee Workweek, and, drumroll, Delivery Times. And somehow this disaster of a report is supposed to bring peace and comfort to the market that things are getting better? Perhaps at the Fed's data manipulation department. And just like a 2.9 million seasonal NFP adjustment in January has resulted in an ebullient market tone, we wonder just how high 3 out of 9 subindices improving will send the market today?

Here is the spin direct from the source:

The general business conditions index rose six points in February to 19.5, its highest level since June 2010. The index was last negative in October, then rose to a level of around zero in November; subsequently, the readings have become increasingly positive, suggesting that the expansion in business activity for New York manufacturers has gained momentum in recent months. The new orders index fell four points to 9.7, indicating that orders climbed at a slower pace. The shipments index held steady at 22.8. The unfi lled orders index inched down two points to -7.1, and the delivery time index rose four points to 1.2. After climbing above zero last month, the inventories index  fell eleven points to -4.7; the return to negative territory indicated that inventory levels were slightly lower.

And yet despite all the fudging, expectations somehow declined:

Six-Month Outlook Remains Upbeat


Indexes for the six-month outlook, while somewhat lower than last month, conveyed a widespread expectation that conditions would improve in the months ahead. The future general business conditions index fell four points to 50.4, with 58 percent of respondents  expecting conditions to improve over the next six months and 7 percent expecting conditions to worsen. The future new orders and shipments indexes also declined, but remained at high levels. The future prices paid index advanced nine points to 62.4, indicating that  input prices  were expected to rise signifi cantly. The future prices received index climbed three points to 34.1. Future employment indexes suggested that fi rms foresaw an increase in employment. The capital spending index rose six points to 31.8, its highest level in a year, and  the technology spending index held steady at 18.8

Full paperweight here.


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