The July Philly Fed survey was -7.5, 3 points weaker than expected and down from -2.2 in June and in contrast to the better than expected NY survey yesterday. New Orders and Backlogs did improve but remained negative while the Employment component fell by 3.5 points to -25.3 off the lowest level since Oct. Inventories were little changed at -15.4 but that is after rising by 13 points in June and is near the lowest since Aug ’08, so further evidence that the huge inventory drawdowns are running its course. Prices Paid rose by 9.3 points to -3.5 and is the least negative since Oct ’08 but Prices Received fell 5 points. The average workweek did improve to -15.5 from -26.6 and is at the best level since Sept ’08. The 6 month outlook moderated somewhat to 51.9 from 60.1 which was the highest since Sept ’03. Blah is the best way of describing the data while optimism still reigns that the 2nd half will see much improvement.
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