Philly Fed: Heh, Improvement?

Posted 2012-12-20 12:20
by Karl Denninger
in Macro Factors

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of ‑10.7 in November to 8.1 this month. This is the highest reading since April and is slightly above the reading before the post-storm decline in November (see Chart). The demand for manufactured goods picked up: the new orders index increased 15 points, from ‑4.6 in November to 10.7 this month. The current shipments index also improved notably, rising by 25 points.

That's a significant improvement -- and employment picked up into positive territory both on count and hours. This bears watching, although it doesn't prevent the already-baked in the cake recession from materializing -- it simply means that as is usually the case about six months later things start to improve (and that will lead the end of the recession by six months as well.)

Note that we need three consecutive months with a positive figure and trend to indicate that this is "real", or a broad indication from all the various regional surveys.

As such this is a positive report but don't over-emphasize it's impact -- until and unless it's confirmed.

The "special questions" sections is big trouble though in health benefit cost expectations -- virtually everyone is looking for huge increases, with the largest block expecting 7.5-10% increases and a nasty chunk expecting a >15% increase.

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