Time for this sign, I think...

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 1.3 in April to -5.2 this month. 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).

No kidding?

New orders went from -1 to -7.9, shipments from 9.1 to -8.5 (!!), employees went from -6.8 to -8.7 (bad and getting worse) and employee workweek went from -2.1 to -12.4 (from crummy to catastrophically bad.)

But.... expectations are up to 32.3 .vs. 19.5.

Yeah, ok, like the last year or so has had expectations up and it's turned out real well -- right?

Wrong.

From the Bureau of Lies and Scams:

On a seasonally adjusted basis, the Consumer Price Index for All Urban Consumers decreased 0.4 percent in April after decreasing 0.2 percent in March. The index for all items less food and energy rose 0.1 percent in April, the same increase as in March.

The change was mostly gas prices.  You can argue this is good (and it's easy to argue that) but the question is whether the internals tell us anything interesting that's not instantly obvious.  Let's have a look at the internals and, as usual, I will use the unadjusted figures.

Gasoline was down 3.7%, which is big -- but piped gas (not as important this time of year as it would be in the winter) was up 2.9% on the month.  An interesting outlier is that hospital services were down 0.8% this last month, begging the question -- a blip or have we hit the wall?

Cereals and bread were both up (you shouldn't eat either anyway) on the month, along with other bakery products.  Meats were mixed; beef and pork were down a bit but chicken up.  Seafood was up 3% on the month, which is a fairly big move.  That deserves monitoring.

Mens apparel was up quite significantly while women's was down a bit.  These are frequently noisy however, so I can't read too much into this immediately.  

TVs continue to get cheaper; down 2.4% on the month and 17.4% on the year, while other video and audio gear also continues the slide.  Those who think "deflation" is bad need to consider that the idiot box in your house has become much more affordable to buy because of it -- are you sure you don't like better, faster, cheaper?

Ditto for IT-related things.  The next time someone tells that "deflation is bad" please brain them with your iPad; the entire range of IT-related things continues to decline in price on a "hedonic basis" at a roughy 7.5% annualized rate.  This is good, not bad. 

But don't worry -- college tuition contiunues to go up at 4.6% annually.  Eat a professor -- or Dean.  They're low-carb.

Overall?  There's not much in here that's news -- the bottom line is that the headline number was all energy.

The May 2013 Empire State Manufacturing Survey indicates that conditions for New York manufacturers declined marginally. The general business conditions index fell four points to -1.4, its first negative reading since January. The new orders index also edged into negative territory, and the shipments index fell to zero. The prices paid index declined eight points to 20.5, indicating a slowdown in selling price increases, while the prices received index was little changed at 4.6. Employment indexes were mixed, showing both a modest increase in the number of employees and a slight decline in the length of the average workweek.

New orders and shipments are both negative, along with unfilled orders and delivery times.  Inventories remain negative.  The prices paid/received gap has narrowed this month and while employee count softened a bit it remains positive.

What isn't is hours -- it went negative.  Obamacare my friends. 

This amplifies and ratifies what was evident in the employment report last month.  We'll see if it continues through the other regional surveys.

If it does (and I expect it will) The Fed will have an interesting conundrum on its hands -- faced with increasing evidence that "QE" doesn't work and the impending crack-up that is happening now in Japan, what's their next move?

My guess is that Bernanke has tipped his hand given that he's already started blaming Congress.  

We'll see.

Oh this is interesting....

The Producer Price Index for finished goods decreased 0.7 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Prices for finished goods fell 0.6 percent in March and increased 0.7 percent in February.

Hmmmm... where's the change?  Oh, it's in foods and energy, with energy down 2.5%.  Ex both the PPI was up 0.1%.

However, this is is interesting in the intermediate and crude goods section:

While this is a volatile series the fact is that ex food and energy pricing power is flagging in producer prices -- and that's being polite.

Hmmm....

The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for April, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $419.0 billion, an increase of 0.1 percent (±0.3%)* from the previous month, and 3.7 percent (±0.7%) above April 2012. Total sales for the February through April 2013 period were up 3.7 percent (±0.5%) from the same period a year ago. The February to March 2013 percent change was revised from -0.4 percent (±0.5%)* to -0.5 percent (±0.2%).

Note that February to March was revised down; this of course makes a 0 into a +0.1%.

Let's look inside the unadjusted figures, which is where I always go as they're counts and not subject to "let's add our own personal fudge factor to the number!" games.

Down this month were autos, furniture, electronics, food, health and personal care, gasoline, clothing, sporting goods, general merchandise, miscellaneous retailers, internet retailers and food and drinking establishments.  What was up?  Building supplies.  That's it.

Some of the changes on an unadjusted basis were colossal.  Electronics were off 11%.  Food and beverage stores (groceries) were off 7.5% (!!)  Gas was off about 4%, but remember that gas prices have been coming down, so the volume is likely close to unchanged.  And internet-based sales were down 1.2%.

Sucks?  Oh yeah -- but for "adjustments" the real figure was -2.6% for April.

You judge whether the "adjustments" are warranted -- or pure crap.