The worst things get, the more they stay the same.
As the stock market continues to set records, the latest Philadelphia Fed Business Outlook Survey shows that the business outlook for manufacturing is weakening. Of course, that could help continue to boost the market, since it gives The Fed an excuse to continue its quantitative easing.
The overall business outlook is down 5.2% from the previous survey, which is lower than the lowest expectation (a 2.0% improvement was expected).
Virtually all data in the Philly Fed survey were negative, except inventories (up 4.1%) and Prices Paid (up 6.9%). New orders dropped 7.9% after a 1.0% drop during the previous month’s survey, shipments increased 9.1% last month, but were down this month by 8.5, and the number of employees shrank from 6.8% to a drop of 8.7%.
While the survey indicates weakening activity this month, The Philly Fed reported that “firms continue to expect positive growth over the next six months.” We’re not sure why.