Philly Fed Business Outlook - Not Much That's Good (employment, economy, good news)

[DRob4JC]

No good news in this report. Don't hear this stuff at all on broadcast media.

Indicators

The current activity index has shown no pattern of sustained growth over the past seven months, generally alternating between positive and negative readings (see chart). The number of firms reporting decreased activity this month (29 percent) edged out those reporting increased activity (24 percent).

Other current indicators showed similar weakness this month. The demand for manufactured goods remained weak, with the current new orders index declining from -1.0 to -7.9. The shipments index also indicated weakness, decreasing more sharply from 9.1 to -8.5.

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Labor market conditions showed continued weakness, with indexes suggesting lower employment overall. The employment index decreased 2 points to -8.7, its second consecutive negative reading.

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The workweek index declined 10 points to -12.4, remaining negative for the fifth consecutive month.

Summary

The May Business Outlook Survey indicates some weakening of activity this month, with all of the broad indicators recording negative diffusion indexes. The survey’s indicators have failed to exhibit any sustained pattern of growth in recent months. The indicators for general activity, new orders, and shipments suggest weaker conditions this month, and firms reported employment reductions. Price pressures continue to be modest. Despite weaker current indicators, firms continue to expect positive growth over the next six months.

So expectations are up - even though the data suggests otherwise.