• 18 hours 2021 Could Be A Huge Year For Chinese Stocks
  • 2 days Shadowy Brokers Target Easy TikTok Money In New Scheme
  • 3 days Cannabis Sales Are Soaring In The United States
  • 4 days Biden Will Be A Boon For Solar Stocks
  • 5 days The Shroom Boom Is Here To Stay
  • 8 days The Gold Rally Has Finally Run Out Of Steam
  • 8 days Citibank Analyst Predicts $300k Bitcoin By End Of 2021
  • 11 days Bitcoin Lives Up To Its Safe Haven Status In A Big Way
  • 11 days 14 Million People Will Lose Unemployment Benefits On December 31st
  • 13 days Why 12 Million American Millionaires Isn’t Good News
  • 14 days Big Oil Is Paying The Price For Investing In Renewables
  • 15 days The Banking Industry’s $35 Billion Gravy Train Could Disappear
  • 16 days Did Amazon Just Democratize Prescription Drugs?
  • 17 days The Private Space Race Just Got Very Real
  • 19 days Short Sellers Are Willing Big In This Turbulent Market
  • 20 days SpaceX Gets Go-Ahead To Send Humans Into Space
  • 21 days Saudi Arabia Lost $27 Billion In Oil Crash
  • 22 days China’s Big Tech Takes A Hit As Regulators Crack Down
  • 23 days Black Friday Could Be Retailers’ Only Hope
  • 24 days Why You Should Not Dump Your Stay At Home Stocks Just Yet
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

  1. Home
  2. Markets
  3. Other

Future Expectations Made Six Months Ago vs. Today's Reality

On Thursday, I noted Bloomberg's comment "Something Very Wrong" with the manufacturing sector.

More completely, Bloomberg stated "There may very well be something wrong with the manufacturing sector, at least in the Northeast where the Empire State index has been in deep negative ground for the last two months followed now by a minus 6.0 headline for the Philly Fed index."

With that comment, let's dig deeper into the latest Philadelphia Fed Business Outlook Survey.

Here is a chart that shows current conditions compared to manufacturer's expectations six month's from now.


Current vs. Future Activity

Current and Future General Activity Indexes


Future is Bright!

The Philadelphia Fed reported ...

Future Indexes Remained Generally Optimistic

The survey's broadest indicator of future growth edged slightly higher this month. The future general activity index increased 1 point, to 44.0, its highest reading since January. The future index for new orders, at 44.4, decreased 2 points, while the future shipments index, at 41.4, increased 4 points. Furthermore, 28 percent of the firms expect expansion in their workforce over the next six months, while 10 percent expect a reduction.


Future Expectations vs. Reality

To check the usefulness of these future projections, I downloaded the data, then shifted the look-ahead projections by six months and plotted those forecasts vs. current conditions.

Philadelphia Fed Manufacturing Region

The above chart shows what manufacturers expected six months ago vs. what actually happened.

A major portion of the time, look-ahead sentiment vs. reality are inversely correlated. Note in particular, the sharp rise in expectations vs. the actual sharp decline (third purple box) that started in November or December of 2014.


Northeast?

As for Bloomberg's comment "There may very well be something wrong with the manufacturing sector, at least in the Northeast" here are some thoughts also posted earlier.

 

Back to homepage

Leave a comment

Leave a comment