The Awful Numbers Behind Today's Philly Fed Disaster

Thunderstorm

Photo: Wikipedia

This morning’s Philly Fed survey came back with some awful details, indicating that the strength of the U.S. economy is now in sharp decline.The headline survey number plummeted from 18.5 to 3.9. It was expected to rise to 20. We’re not in negative territory yet, but the survey suggests that optimism is fading

It’s part of a broader trend shows continued weakness in the U.S. economy: bad data on the real estate market, jobless claims consistently above 400,000, and continued concerns about rising inflation.

It’s important to note that there is some good news here in the charts, with the survey number on the employment situation improving. Also, if your big concern is inflation and inflation expectations, there’s some good news here for you too.

The number of businesses who see improvement has plummeted

Optimism is fading about the future

Fewer and fewer businesses seeing new order growth

Same with current shipments

Meanwhile, the prices paid index is still incredibly high

But prices received are fading

The good news is fading for workers

At least CapEx improved

And actually hiring got a bit better

But it's not looking good in the long run

But what are the underlying reasons for this Philly Fed weakness?

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