Empire manufacturing data

There was a slight uptick in the main number, but there are some not so rosy things inside the report.  Here is the latest chart.

We can see the short term data for the General Business Conditions is still in a down trend.  Notice the huge drop in the Future General Business Conditions index.  It is very similar to the plunges in 2008 and last year. Those instances came when markets were crashing and fear was in the air everywhere.  We clearly do not have that situation this time.  What exactly is causing the huge drop in future expectations?  I suspect this is a lot about Europe.  A business person would have to be hiding in a cave not to know what is going on in the global economy.  A future business reading this low coincided with recessions in 2001 and 2007.   Time will tell if that is the case again.

Here is the new orders chart.

The new orders index went negative again like it did last year.  Compare that chart with the one below which is based on expectations six months out.

We can see that while the current new orders went negative in July last year, the future expectations were still positive.  After the market crashed in late July and early Aug. the next future reading was much lower.  That was probably more psychological then reality.  The future outlook ticked up in September while the current data declined.  The current orders ticked up in October following the rise in the future outlook the month before. Even though the November current new orders did not change much, the future outlook shot up.  The new orders started to follow the very next month.  In the current situation the future outlook went negative last month before the current new orders index.  The future outlook declined a bit again this month.  It seems unlikely there will be an upsurge in new orders next month to signal the economy is reviving.  This is yet another data point showing continued weakness.

Bob