Federal Reserve Bank of Philadelphia: Here’s Your Recession!

Philly Fed

Three months a recession call does make, and as I predicted we were going to get that third month.

 Firms responding to the July Business Outlook Survey continued to report weak business conditions. Although the survey’s indicators for general activity, new orders, and shipments improved from June, they remained negative this month, suggesting overall declines in business. Firms also reported declines in employment this month and shorter work hours. The manufacturers reported near]steady input and output prices this month. The survey’s indicators of activity over the next six months remained positive but moderated somewhat from June.

The big table says….

The most-important aspect of this report is that employees went negative.  These are diffusion indices so a negative print (but less-negative) is a change in the rate of deterioration but not in the direction of movement.

Workweek tends to lead employment, and at the point that employment turns it’s too late to prevent the economic impact from broadening and turning into recession.

Here it comes; the “official call” will probably show up in November or December — four months or so after hits you.

So why didn’t the market dive?  It expects more Fed heroin.  But whether that comes or not won’t matter; remember that we currently are “under the influence” of Fed games and yet the numbers, as shown here, just plain suck.

The Market-Ticker

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