‘Soft’ Data Slumps – Philly Fed Plunges Most In Over 2 Years As Trumphoria Fades

Having surged to its highest levels since 1984 in February, Philly Fed's Manufacturing survey (soft data) has collapsed in the last two months (biggest drop since Jan 2015). The 22.00 print mised expectations and was the lowest since Dec 2016 amid a big slump in new orders and shipments.


The index for current manufacturing activity in the region decreased from a reading of 32.8 in March to 22.0 this month. The index has been positive for nine consecutive months and remains at a relatively high reading but has moved down the past two months. Thirty-seven percent of the firms indicated increases in activity in April, while 15 percent reported decreases.

Crucially the 'hope' subcomponent plunged to 45.5 (contracting) – the lowest since the election.

The full breakdown shows the big decline in shipments and new orders.

The current new orders and shipments indexes remained at high readings but declined 11 points and 10 points, respectively. Both the delivery times and unfilled orders indexes were positive for the sixth consecutive month, suggesting longer delivery times and increases in unfilled orders. Firms reported an increase in manufacturing employment and work hours this month. The percentage of firms reporting an increase in employment (27 percent) exceeded the percentage reporting a decrease (8 percent).

The current employment index improved 2 points, its fifth consecutive positive reading . Firms also reported an increase in work hours this month: The average workweek index was nearly unchanged at 18.9 and has registered a positive reading for six consecutive months.

Furthemore it appears Reflation fatigue is seting in as the prices paid index decreased 7 points to 33.7. With respect to prices received for firms’ own manufactured goods, 30 percent of the firms reported higher prices, and 13 percent reported lower prices. The prices received index decreased 4 points.

Soft data is giving up the hope…

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