[credit provider=”Wikimedia Commons” url=”http://commons.wikimedia.org/wiki/File:Phillies_Phanatic.jpg”]
Update: Holy cow.
The Philly Fed index just came in at -30.7, an epic drop form the +3.2 we saw last month.
Estimates were actually for it to go somewhat higher to +2.
The situation confirms the bad news we got earlier this week from the Empire Fed.
A horrible sign for the economy, as the double-dip scenario looks more real than ever.
Markets at lows of the day.
Responses to the Business Outlook Survey this month suggest that regional manufacturing activity has dipped significantly. The survey’s broad indicators for activity, shipments, and new orders all declined sharply from last month. Firms indicated that employment and average work hours are lower this month. Price indexes continued to show a trend of moderating price pressures. The broadest indicator of future activity also weakened markedly, but firms still expect overall growth in shipments, new orders, and employment over the next six months. The collection period for this month’s survey ran from August 8-16, overlapping a week of unusually high volatility in both domestic and international financial markets.
All Indicators Show Declines
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a slightly positive reading of 3.2 in July to -30.7 in August. The index is now at its lowest level since March 2009 (see Chart). The demand for manufactured goods, as measured by the current new orders index, paralleled the decline in the general activity index, falling 27 points. The current shipments index fell 18 points and recorded its first negative reading since September of last year. Suggesting weakening activity, indexes for inventories, unfilled orders, and delivery times were all in negative territory this month.
Firms’ responses suggest a deterioration in the labour market compared with July. The current employment index fell 14 points, recording its first negative reading in 12 months. About 18 per cent of the firms reported an increase in employment, but 23 per cent reported a decrease. The percentage of firms reporting a shorter workweek (28 per cent) was greater than the percentage reporting a longer one (14 per cent). The workweek index fell 9 points.
Big piece of data coming up.
The Philly Fed manufacturing report comes out at 10:00, and it should help to confirm/deny the ugly Empire number from Tuesday, which showed a major dropoff in the survey.
Analysts actually expect a positive 2 reading, which seems hard to believe. Empire was sharply negative.
Note that markets are getting crushed right now. Can the market take more bad news?