• 3 days Quantum Computing Is The Newest Megatrend In Silicon Valley
  • 4 days How To Invest In The Cybersecurity Boom
  • 6 days Investors Are Patient With Unprofitable Giants
  • 8 days Wells Fargo Back In The Scandal Spotlight Once Again
  • 10 days 5 Stocks To Keep A Close Eye On This Year
  • 11 days As Auto Giants Flail, Look To Chip Stocks For Gains
  • 12 days Central America Is Ready For The Bitcoin Hustle
  • 14 days China’s Video Game Restrictions Unlikely To Slow Down Booming Industry
  • 15 days Top Performing Stocks As Inflation Fears Grow
  • 16 days US Airline Stocks Take A Beating On New EU Restrictions
  • 17 days This IPO Could Open Sustainable Fashion Floodgates
  • 18 days Crypto Crime Nets Another $2B Fraudster
  • 20 days This Week’s Hottest Meme Stocks
  • 21 days Why World Markets Should Be Watching Germany Closely
  • 23 days Could ‘Cultured’ Meat Rival The Plant-Based Megatrend?
  • 26 days ‘Easy Money’: Crypto Is Still Attracting Newbie Investors
  • 27 days Foreign Syndicates May Have Stolen Up To $400B In COVID Benefits
  • 28 days Gold Jumps Above $1800 Ahead Of Jackson Hole Summit
  • 28 days International Banks Blacklist Afghanistan Following Taliban Takeover
  • 30 days China’s Tycoons Are Getting A Serious Reality Check
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

  1. Home
  2. Markets
  3. Other

Empire State and Philly Fed Reports Positive: Worst Over for Manufacturing?

On Tuesday, the Empire State manufacturing region returned to positive territory following seven months of contraction.

Today, the Philadelphia Fed manufacturing region returned to positive territory following five months of contraction.

Is the worst over for manufacturing or is this simply a breather?

Let's start with a look at the Empire State and Philadelphia Fed reports.


Empire State

Empire State 2016-03-14A

The headline general business conditions for the Empire State region climbed seventeen points to 0.6, its first positive reading since July of last year. The new orders and shipments indexes rose well above zero for the first time in several months, pointing to an increase in both orders and shipments. Labor market conditions were little changed, with employment and the average workweek holding fairly steady.


Empire State Details

That's quite an improvement in the New York region. Let's turn to Philadelphia.


Philly Fed Index

Philly Fed 2016-03-16


Philly Fed Details

Philly Fed 2016-03-16A


Fundamental Change?

Here's the key question: Do these reports represent a fundamental change?

I suspect not, for numerous reasons:

  1. Slowing retail sales (See Retail Sales Down, January Sales Revised to -0.4%)
  2. Inventory-to-Sales reports that look horrific (I will report on that later today)
  3. CEO hiring expectations (see 38% of Companies to Reduce Employment in 2016, Only 29% Expect Increase: Five Consequences)
  4. That 82.8% Expect Real Incomes Will Decline in 2016.
  5. The global economy still looks anemic.
  6. The US dollar, although starting to fall, is strong enough to hamper exports.

In regards to point four, It's not just the consumer expectation of falling real incomes, Obamacare premiums and rising rents nearly guarantee that outcome.

So why the jump? Things don't fall or rise forever. I had actually been expecting a jump; I just did not know when. This was the month.

Orders get put off, and off, and at some point they have to rise, from very depressed levels. Stabilization or even slight improvements from here do not represent good times for manufacturers.

This bounce looks good, but it must be viewed in light of falling orders for months on end that had to turn at some point, for a while.

 

Back to homepage

Leave a comment

Leave a comment