The Philly Fed was a disaster on Thursday.
And, yes, it was expected to be horrible.
Just like the Empire Fed print on Wednesday, expectations were for a steep decline from March’s already depressed levels. And, also just like the Empire gauge, the numbers were worse than expected. The headline index printed -56.6, nearly 27 points below consensus.
On the “bright” side, it wasn’t as bad as the worst estimate. The low-end of the range from 49 economists was -70, so I suppose we should count ourselves lucky.
“The survey’s current indicators for general activity, new orders, and shipments once again fell sharply this month to long-term low readings, coinciding with ongoing developments related to the coronavirus pandemic”, the accompanying color reads. “The indexes for employment and the average workweek, which had both remained positive last month, fell into negative territory this month”.
New orders dropped to -70.9, and shipments to -74.1. Those are steep declines – and the deliberately understated nature of that assessment is my attempt to inject some humor into an otherwise somber situation. That is, “steep” isn’t really an adequate adjective.
The readily apparent malaise notwithstanding, hope floats.
“Despite the current weakened conditions, the respondents remained optimistic about growth over the next six months”, the release reads. “The diffusion index for future general activity rose 8 points to 43.0, mostly offsetting a 10 point decline last month”.
