As expected, manufacturing in the Philadelphia Fed region continues a long string of contractions.
Economists were pretty much on target, something that frequently happens when the current month is a repeat of last month.
The Econoday Consensus was -2.5 with an actual reading of -2.8. Last month’s reading was -3.5.
The Philly Fed report, much like Tuesday’s Empire State report, is pointing to continuing trouble for the nation’s factory sector. The general business conditions index came in at minus 2.8 to extend a long run of negative readings. New orders, at minus 5.3, have also been stuck in the minus column as have unfilled orders, at minus 12.7. Shipments, at plus 2.5, are positive for a second straight month but aren’t likely to hold above zero for very long given the weakness in orders. Employment is in the contraction column for a second straight month at minus 5.0 with the workweek also posting a second month of contraction at minus 12.9. Manufacturers in the region continue to draw down inventories, to indicate sagging expectations, with the 6-month outlook down nearly 2 points to 17.3 which is still in the plus column but very low for this reading. Price data continue hold in the negative column. This report is a disappointment and belies yesterday’s manufacturing strength in the industrial production report.
Philadelphia Fed vs. Industrial Production
This was the sixth consecutive month of manufacturing contraction in the Philly Fed region.
Mike “Mish” Shedlock