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Friday, October 19, 2012

Philly FED data

The Philly FED index surprised to the upside in the main number, but the internals were not so good.  Here is the chart.


The main index crossed back above zero after 5 months of being negative.  That is tempered though by the six-month forecast index doing a big about face from last month.  The sub indexes are also not good.  Here is the table of all the sub indexes for comparison.


New orders, shipments, unfilled orders, number of employees, and average employee workweek were all still in contraction.  Inventories were rising along with prices paid and prices received.  The slight cross into positive territory last month in new orders was not continued this month.  The internals of the current conditions are not good, but look at the six month outlook.  There was a big drop in all the same important sub indexes.

Last fall the future outlook started ramping up and new orders followed suit.  Instead of new orders coming in this month, the future outlook did an about face.  This report is not as terrible as they have been in recent months, but it does not signal a rebounding economy yet either.

Here is an interesting chart of the employment sub index.

Source: YCharts

There has been some correlation between the non-farm payrolls and the Philly FED employment index.   Notice the employment index is in much worse shape then it was last fall in the recession scare.  By the time it got this negative in 2008, we were already well into the last recession.  Is it different this time?  Will the employment index turn up before the payrolls turn down?  Unfortunately we will have to wait for that answer.  It still looks like the economy is rather fragile.


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