Courtesy of Mish.
Inquiring minds are digging into the Philadelphia Fed Manufacturing Survey for January 2013.
Business outlook Survey, Current and 6 Months From Now
Observations
- The business conditions index is solidly in the red following an increase in December
- New orders are in contraction
- Prices received is in contraction
- Shipments are treading water
- The only component solidly in the green is prices paid. This is indicative of a margin squeeze on producers who cannot pass on costs.
Unwarranted Future Optimism
Please note the current index is -5.8 but future expectations rose from 23.7 to 29.2. That rise is indicative of unwarranted rampant optimism that will not pan out. Here's five reasons.
- The economy is slowing already and payroll tax hikes will subtract .8% or more from GDP.
- Cuts from sequestration (probably minimal but possibly not) will also subtract from GDP.
- GDP is barely treading water already (see Global PC Shipments Decline 6.4%; Best Buy Sales Flat; Toys R Us Sales Decline 4.5%; 4th Quarter GDP Estimate Reduced to .8% from 1.5%).
- There is no pent-up demand for autos or much of anything else after this three-year Fed-sponsored boom.
- Europe is a basket case and China is slowing, so growth from exports is unlikely.
Hiring Plans Special Questions
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