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Tuesday, December 18, 2012

Empire manufacturing survey

The Empire data came out much worse then expected this morning.  The expectations I saw were for a positive reading.  That was not the case.  Here is the chart.


We have now had five months in a row of negative readings.  That is the same number we had last year before the survey turned positive in Nov.  Will we continue to see weakness or will we get a turn up early next year?  Lets look at some of the sub indexes.

Here is the new orders index.

The small positive reading we got last month did not continue this month.  We are just not seeing the year end surge we saw last year.

Check out the unfilled orders sub index.

Unfilled orders have been contracting all year.  Exactly how many of these unfilled orders did they have in Jan.

Here is the employment sub index.

This sub index contracted at a pretty good rate again.

Here is the hours worked sub index.

The hours worked each week has contracted again.  This is normally a leading index to the employees sub index as most companies adjust current employee hours before hiring or firing people.  This does not seem to bode well for the employee index turning around next month.

Here is a look at the  new orders and employee indexes six months out.

There is quite a bit of optimism in both of these charts about next year.  That could be a reason why there have not been many layoffs to this point.  The question is whether this optimism is based on hope or something tangible.  Unfortunately, I don't think we can tell.  If you look at the first chart again we can see a big spike up in the blue line (six month out business conditions index) just before it crashed down in 2008.  I think we will have to wait and see if the new orders come in or not.  At this point there is no clear sign of a pickup in business yet.


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