The Aug Philly Fed survey was a big miss at -7.7 vs expectations of +7.0. It’s the weakest reading since July ’09 and is down from 5.1 last month. Every category except Prices Paid was negative. New Orders fell almost 3 pts to -7.1, the lowest since June ’09 and Backlogs also fell 3 pts. Shipments fell 8.5 pts and Employment fell from +4 to -2.7, the weakest since Oct ’09. Inventories fell 15 pts to -11.6. Prices Paid fell 2.3 pts at 11.8 and Prices Received fell 4.1 pts at -12.5. The Avg Workweek fell to a one yr low. The Business Activity outlook over the next 6 mo’s fell to 19.6 from 25, the lowest since Mar ’09 as “optimism has waned notably in recent months” according to the Fed Res Bank of Philly. Bottom line, while very weak, it follows the 1st Aug data point seen on Monday, the NY survey, which was just shy of estimates at +7.1, thus we need to see other regional surveys and then reconcile it with the national ISM to see just how soft things have gotten.
