The Bloomberg Econoday consensus for the Philly Fed index was 0, a decline of 3.2 points. Instead, the index jumped to 15.5
The Philly Fed Diffusion Index is computed a a percentage of respondents indicating an increase minus the percentage indicating a decrease.
Current Conditions
- Current Indicators Improve This Month
- The diffusion index for current general activity rose 12 points to 15.5 in April, its third consecutive positive reading and highest reading since April 2022.
- Almost 38 percent of the firms reported increases in general activity this month, while 22 percent reported decreases; 40 percent reported no change.
- The index for new orders increased 7 points in April, its second consecutive positive reading. The current shipments index rose 8 points to 19.1 this month.
- The firms continued to report an overall decline in employment. The employment index edged down 1 point to -10.7 in April, its 12th negative reading in the past 14 months.
- Most firms (77 percent) continued to report no change in employment, while the share of firms reporting decreases (16 percent) exceeded the share reporting increases (6 percent).
- The average workweek index fell further, from -0.2 to -18.7.
Firms Continue to Report Overall Price Increases
- The prices paid index jumped from 3.7 in March to 23.0 in April, its highest reading since December 2023 and near, but below, its long-run average .
- Almost 26 percent of the firms reported increases in input prices (up from 14 percent last month), while 3 percent reported decreases (down from 10 percent); 70 percent reported no change (down from 75 percent).
- The current prices received index ticked up 1 point to 5.5. Almost 12 percent of the firms reported increases in the prices of their own goods, 6 percent reported decreases, and 82 percent reported no change.
Prices Paid vs Prices Received
In general, more respondents report the prices they pay for goods than respondents report receiving for their goods.
Understanding Diffusion Indexes
I caution that in diffusion indexes only direction matters not magnitude.
A firm reporting prices rose by 5 percent will offset one reporting prices fell by 20 percent.
The same applies to employment. A firm hiring 1 person will offset another laying off 200.
Final Thoughts
When I saw the large and unexpected jump, I decided to create new charts.
I downloaded data for my charts from the St Louis Fed. It has stale data for new orders and costs for wages and benefits.
The Philly Fed said new orders rose by 7 points for a second consecutive positive month. The St. Louis Fed has last month at -3.9 and has no data for this month. This is a St. Louis Fed issue. I will notify them.
Looking at prices paid vs prices received, and employment vs wages and benefits costs, all does not seem well despite the glowing headline number.
If anything, the data looks stagflationary with a caveat about diffusion indexes. It’s hard to reconcile Wages +35.3 with Employment at -10.7 and a Work Week of -18.7 as well, and make anything too positive out of it.
Economists Believe Biden Would Be Better for the Economy
In case you missed it please note Hoot of the Day: Economists Believe Biden Would Be Better for the Economy
Manufacturing is relocating out of New York.
That appears to be the current trend. Can you provide any data on how many manufacturers are expected to leave New York this year? And where are they moving to?
The states with the largest number of manufacturers are:
California: 23000
Texas: 17500
Ohio: 15000
Illinois: 14700
New York: 14000
@KGB wrote: “Manufacturing is relocating out of New York.”
Everyone (not just manufacturers) are moving out of a third world banana republic that is getting worse by the day
Been an inveterate Fed Watcher (for 52 years). The FED doesn’t know a debit from a credit, money from mud pie, a bank from a nonbank. The DIDMCA of March 31st, 1980, turned the nonbanks into banks. It caused the S&L crisis.
Now, the FED has turned retail MMMFs into banks. So, the money stock is misstated. It makes a difference because funds emptied out of the O/N RRP increase both the money stock and interbank demand deposits.
Combine that with Large CDs not being counted in the money stock, but should be. And they are rapidly increasing, more than offsetting any decline in M1 or M2.
You openly admit that you have been wasting your time for 52 years, following an institution you have no faith in, just so you can complain about them.
Lol!
What a loser!
This economy can handle a couple of more rate HIKES. You heard that right. Unemployment is not rising fast enough. The Fed needs to work with regulators to regulate the derivatives markets again. Too much inflation is being caused by derivatives on commodities. Also remove some M2 from the supply. I predict Powell will be channeling his inner Volcker soon.
The derivatives markets on commodities is tiny — its less than 10% of the total in the USA, and lower than that abroad. The rest of the world is trying to increase their standard of living, while the US and Europe are in decline and give false signals about demand.
Brazil is selling its agriculture products outside of the USA. The Saudis are emphasizing crude oil sales to Asia. Metals too. The USA isn’t the center of growth, its a mature market led by a clueless octogenarian and a sh!t load of credit card debt.
US consumers are tapped out. Stimulus checks are artificial demand, and every vendor with a brain cell knows it.
Inflation is being driven by endless debt based spending — $2 trillion per year officially, but probably closer to $3.5 trillion in reality (not counting the unreported increase in “entitlement” debts).
“The Fed needs to work with regulators to regulate the derivatives markets again. Too much inflation is being caused by derivatives on commodities.”
It’s also important to note that the CFMA of 1999 allows banks to limitlessly manipulate commodity futures in complete secrecy through the CFTC,
If a desired outcome is wanted on a regular asset, banks can manipulate input prices accordingly.
The “mysterious” surge in oil prices to $145 barrel, circa 2008, was later revealed to be the same banks who were short Sub-prime derivatives, Bernie Sanders leaked the records back in 2010.
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More statistical fiction.
Academics on sabbatical from their ivory towers, working for Federal Reserve banks, making sh!t up to tamper with elections.
They have been doing this with unemployment numbers for over a year — first they report “good” or “great” numbers, the dimwits in media trumpet those estimates.
Meanwhile, the previous few months all get revised downward, and media dimwits ignore that. By the time the calendar rolls around, they claim “unprecedented growth” off the revised numbers.
Mish isn’t much of a market analyst if he hasn’t caught on to this crap by now
“Mish isn’t much of a market analyst if he hasn’t caught on to this crap by now”
Then why are you here? What narrative do you want Mish to give you to make you happy? Go back to Zerohedge where all the other trolls live.
I’m here mostly for entertainment, see the animals in their native habitat flinging poop at each other.
Its often safe to bet against whatever narrative is on mish channel, especially when he starts touting how he is a (former) chicago “libertarian” who just happens to always favor democrats.
“Its” (Its Poop is being flung…”) is possessive and you should have used the Conjunctive, “It’s.”
“It’s often safe to use the correct words so as to not throw curve poops at others.”
Just sayin’.
You are assuming each animal is individually flinging *ITS* poop, but I said they are flinging *THEIR* collective poop at each other (some of which may be their own).
Just sayin’
Oh great. Yet another cult conspiracy moron. Where is that IGNORE button.
You don’t know what a conspiracy is.
Conspiracies are for losers. Lots of losers here. That’s why we need an ignore button. So I don’t have to wade through their excrement.
The U.S. is sending weapons to at least two countries in the middle of a war. Supply chains after the pandemic broke down so now everyone wants to “re-shore” manufacturing closer to home or at home. Why is this a shock?
Throw in IRA and other government spend and it’s a no-brainer. Half the streets within a 2 mile radius of my home are being torn up and rebuilt, that’s lots of tools and manufactured materials needed to make it happen. I am sure it’s happening across the U.S. everywhere.
It’s a booming economy and then there are millions retiring leaving big gaps in labor force, it all adds up once the biases are left off. It’s also why inflation is going back up – demand, demand, demand.
Only question left is what is the best money train to ride. $ …$ …
Supply, supply, supply…
Airline execs expecting record breaking summer. First class selling out.
https://www.cnbc.com/2024/04/17/airline-execs-predict-record-summer-even-more-demand-for-first-class.html
We don’t need no stinking rate cuts
Everyone knows the official statistics are fiction, and CNBC is entertainment. Hot chicks, sound effects, bells, “analysts” looking to sell whatever their firm has in inventory (if they thought it was going up, they would hold on to it).
Everyone is on a plane, looking for the next big thing, or someplace to hide. Everyone is sure it (the next big thing, or the best place to hide) is not where they are now
Lots of hot air from Willy. Tell me something useful Willy. Like what you are investing in. And how you are taking advantage of the situation.
*YOU* should buy US treasuries and urban real estate in NYC, Chicago and San Fransisco.
My investments are carefully chosen, and I don’t give valuable information away for free
Then you are useless to me. I will add you to my list of folks to IGNORE once that feature becomes available. Nothing but hot air from you.
You get the advice you pay for.
I sell my advice to paying customers only.
Translation; you know nothing of value. Got it.
My bet is you do not have much money to invest. You may think you have a lot of money but not relatively speaking.
If you have great ideas then you should share – if everyone here piled in then your assets may appreciate in value.
I have a lot of oil, tobacco (great dividends), and tech.
DId you short gold before tax time?
I don’t trade gold.
You use CNBS as your source for Econ Facts. Sheesh. That is BONEHEAD TV.
The bonehead is a person that can’t distinguish from facts such as “AAPL stock is $167 and recently signed an AI deal with google” and an opinion of someone that says “Apple is a great buy.”
These bonehead people can’t think so they need specially curated commentary from a particular news source so they don’t have to think for themselves then can just regurgitate those talking points.
Airline CEO’s in the article were saying their demand for their product is red hot. That’s a fact jack.
There is an abandoned airfield / desert parking lot in Arizona? Southern California? Hundreds of mothballed airliners, some of which are still usable if demand picks up. Hundreds more have been scavenged for parts.
Billions of dollars in existing supply being mothballed / held back is hardly an indication of a red hot market. If the airline market was really cooking, we would see these mothballed planes pulled out of storage, updated and put into profitable use.
PS – I do see a lot of people flying on discount airlines when they see cheap fares. The discount airlines have gone 100% a-la-carte. A random seat costs this much. Checked luggage extra. Carry on luggage (lots) extra. Picking a seat in advance, extra.
A lot of soon to be retirees have clothes and essentials at their (future) retirement / vacation house, and office clothes in their old residence / closet apartment they are keeping until actual retirement. They don’t need to fly with luggage.
The fares on these discount airlines are similar to what I paid for a “name brand” airline 15 years ago… doesn’t seem like they have a big profit margin. The discount airlines are leasing planes that were abandoned by the big airlines, and the asset backed securities that own the planes are just trying to get back pennies on the dollar.
A decent business for discount airlines. But not a healthy market overall.
The big airlines are losing money on flights, and trying to make it back on frequent flier mile programs. Again, not a healthy flying market
This economy is Joe Biden trespassing in a house where three bears live … I never saw a real bear eat porridge. Investors and speculators, yes.
He is not trespassing. He is just lost and confused. For all he knows, there are three bears living in the 18 wheeler he drives to work, after his son was killed in Iraq. No not the drug addict son who knocked up a exotic dancer — he is talking about the one who died of cancer in a US hospital.
Also don’t get confused between his bribe collecting brother or the uncle who was supposedly shot down and then eaten by cannibals during WW2. The plane had mechanical failures and crashed into the ocean – the body was not disturbed, not even the crabs wanted to eat it.
If it wasn’t for the desperation of the DNC to come up with someone who isn’t a Marxist thug (Newsome, michelle obama, Cacklin’ Harris, etc) … they would have called this administration a textbook case of elder abuse.
Mish had a whole post (the previous one) about why he hates Trump and readers should too. lets see if Mish gives equal treatment to the senile wet fart in the white house?
Yes. Biden is approaching Republican president behavior on the economy. If he doesn’t be careful, he will leave a disaster like his predecessor and every Republican president including and since Reagan.
Biden combines Obama’s foreign policy team with George Bush’s economic team, and a dimwit academic (zero real world experience) as his Treasury secretary. His Secretary of State is openly mocked all over the world. Biden’s administrative staff is full of Marxists.
Biden is an unprecedented failure. No president from either party has screwed up this badly before
Part of Russell Napier’s predictions about the current economy was that the Fed would lose relevance and traders/investors would be slow to catch on, but eventually the market would reflect the real economy.
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Well, they are making up numbers already. Check.
Between the repo market and out of control fiscal spending, the Fed has lost control of the money supply. Check.
Many traders, but certainly not all, are openly saying the official statistics are fiction. So half check? Maybe quarter check?
The big banks are mostly insolvent (all of them) and they absolutely require endless liquidity to avoid admitting they are bankrupt. Big bank analysts like their cushy jobs and are in no hurry to call the Fed’s bluff, lest it blow back on the big banks and the analysts’ paychecks.
So Russell Napier might be early, but its looking like he is correct
Angry tirades about the Fed and fiscal spending…so Chique.
Shoot the messenger if it helps with your denial, but the underlying message is still true.
A debt binge and a senile president are not signs of a healthy economy.
A “choice” between two octogenarians, one of whom is clearly senile, is not a characteristic of a vibrant economy
Unleaded and Diesel prices have inverted. Norther California Unleaded is now 36 cents higher than Diesel. This is in the 5th largest economy in the world. Could freight and Agricultural Tractor use of diesel be faltering?
Thanks to Comrade Newsome’s trucking laws, truckers are avoiding California as much as possible.
Shipping that used to go through the stuck port of L.A. (actually Long Beach) are being diverted to ports in Mexico and Savanna GA, where they can get truckers willing to carry the shipments onward.
There is still California internal traffic, but anything that could be re-routed around California is being diverted.
California is quickly becoming a third world mess, exactly what one would expect from third world government policies