Not Always Sunny! Dis-Inflation & Disappointment For Philly Fed Survey In January (-10.6, Worse Than Expected)

Confounded Interest ^ | 01/18/2024 | Anthony B. Sanders

[Kaiser8408a]

It’s not always sunny in Philadelphia! And not because the Eagles got stomped by Baker Mayfield and the Tampa Bay Bucs.

Manufacturing activity in the Philadelphia region continued to decline in January (for the 18th month of the last 20). The headline Philly Fed survey printed -10.6 (worse than the -6.5 expected) and apart from the insane outlier spike in August, this indicator screams recession…

Source: Bloomberg

More worrying is the fact that hope appears to be dwindling fast as the six-month-forecast for the survey plunged back into contraction (from +12.6 to -4.00)…

Source: Bloomberg

Philly Fed’s demise is consistent with the collapse of hope as ‘soft’ survey data has slumped in the last month, back to its weakest since July (as ‘hard’ data improves relative to expectations)…

Source: Bloomberg

On the bright side for the doves, the dis-inflationary trend remains in tact as priced paid and prices received both plunged in January. However, we highlight the fact that Philly businesses expect price pressure to return in the next six months…

Source: Bloomberg

Overall, the ‘bad news’ in this report should buoy stocks and bonds (lower inflation and lower growth enables sooner and faster cuts)… But will it.

Green man (The Federal Reserve) will stike again!

[EEGator]

I live outside Philly.
It’s such a shithole that no one can tell the difference between good times and bad times…

[Carriage Hill]

Ping.

[Leep]

Nothing can be worse than expected in lefty run government..

[Antoninus]

The deflationary stuff is based 100% on the price of oil and fuel declining precipitously over the past six months. That is all part of the run-up to the 2024 election. Once the Democrats “win” again, oil prices will be headed back, taking inflation along with it.