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Friday, August 17, 2012

Latest regional data

Lets start with the Empire manufacturing survey.

This survey went negative in 2010 and 2011 on quick spikes down.  I think that was caused by the big crashes in the market.  This time is a bit different in that the index has been trending down slowly for several months.  There has been no big panic this year to cause this general decline in business conditions that I know of.  It just appears to be a general slow down in activity.

Here is the new orders index.

New orders continued to decline.  Still no improvement showing up yet.  This is different then last fall when this index started ticking up in Oct. as the market bottomed.

Here is a look at the new orders index based on expectations six months ahead.

We made a new low on this index this month, even lower then last fall.  Not only that, it took a pretty big dip down.  We can see that last year the index bottomed in Aug. and had started to improve slightly in Sept. before the current new orders index ticked up.  This would argue that the new orders index next month is unlikely to rocket up, but this is a limited amount of data to work from.

Now to the Philly Fed data.

This is the fourth month in a row of being negative.  It was slightly less negative then last month, but the six-month forecast ticked down.  Both are still above the low levels reached last year. Lets look at the new orders data as that is probably the most important piece.

New orders are still contracting and there was not much difference from last month.  This is the fourth month in a row of contraction.  It is up slightly from its low, but still needs to cross positive to indicate the worst is likely behind us.

Here is the new order outlook six months out.

This index has dropped below the low from last fall.  Incidentally, this index started ticking up in Sept. last year ahead of the market bottom.  No sign of that yet.

The Empire survey has now joined the Philly Fed in being in contraction mode.  In both surveys, the new orders index six months out made new lows and dropped below the lows from last year.  Things appear to be getting slightly worse.  About the best I can say is that the data is not falling off a cliff.  We clearly have no sign yet of an uptick in economic activity from these surveys.


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