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Business Title: Philadelphia-Area Manufacturing Unexpectedly Shrinks to -7.7 in Fed Index, Jobless Claims Fall 16,000 June 16 (Bloomberg) -- Manufacturing in the Philadelphia region unexpectedly shrank in June for the first time in nine months, raising the risk that factory production may contribute less to the expansion. The Federal Reserve Bank of Philadelphia’s general economic index fell to minus 7.7, the lowest since July 2009, from 3.9 the prior month. Readings less than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware. The median forecast of 54 economists surveyed by Bloomberg News was 7. The report, following data yesterday that showed manufacturing shrank this month in the New York region, adds to concern that the industry is slowing after helping pull the nation out of the recession. Elevated energy prices and supply disruptions related to the Japanese earthquake in March are also weighing on American factories. “We’re flatlining right now,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. “It does make people wonder about how strong economic growth is going to be.” Estimates in the Bloomberg survey ranged from zero to 19.5. Other reports today showed a drop in applications for unemployment insurance, and bigger gain in housing starts than economists projected. The Standard & Poor’s 500 Index increased 0.5 percent to 1,271.37 at 10:58 a.m. in New York. The yield on the benchmark 10-year note declined to 2.93 percent from 2.97 percent late yesterday. Jobless Claims, Housing Jobless claims declined by 16,000 to 414,000 in the week ended June 11, the Labor Department said. The median estimate of economists in a Bloomberg survey called for 420,000 filings. Work began on 560,000 houses at an annual pace, up 3.5 percent from the prior month and exceeding the 545,000 median forecast of economists, Commerce Department figures showed. Americans’ views on the economy’s outlook soured in June, showing that unemployment, inflation and the slump in housing are concerning consumers. The Bloomberg gauge of economic expectations dropped to minus 31 this month, the lowest level since March 2009, from minus 16 in May. The Consumer Comfort Index, issued weekly, improved to minus 44 in the period to June 12, the highest level since mid April, from minus 45.9 as fuel prices kept falling. Orders Slump The Philadelphia Fed’s new orders measure dropped to minus 7.6, the lowest level since June 2009, from 5.4 the prior month. The shipments gauge eased to 4 from 6.5. The employment index decreased to 4.1, the weakest reading since October, from 22.1. The index of prices paid declined to 26.8 from 48.3 the prior month, while a gauge of prices received fell to 4.4 from 16.8. The Philadelphia Fed’s overall index isn’t composed of the individual measures, one reason some economists consider it a gauge of sentiment among manufacturers. An index of the outlook for the next six months dropped to 2.5 in June, the lowest since December 2008, from 16.6. Economists monitor the New York and Philadelphia Fed factory reports for clues about the Institute for Supply Management national figures on manufacturing during the month. The ISM data is due on July 1. New York Figures from the New York Fed yesterday showed the so- called Empire State index dropped to minus 7.8, the lowest level since November, from 11.9 in May. The median forecast in a Bloomberg News survey of economists was 12. Industrial production rebounded in May, another Fed report showed yesterday. Output at factories, mines and utilities rose 0.1 percent, after no change in April. Factory production climbed 0.4 percent, led by the biggest gain in business equipment output in four months. Manufacturing, which makes up about 12 percent of the economy, is likely to keep getting a boost from expanding world trade and a 14 percent drop in the dollar against the currencies of major trading partners in the past year. Businesses benefiting from overseas demand include Dow Chemical Co., the largest U.S. chemical maker. “We are seeing good trends in the vast majority of the markets we serve,” William Weideman, chief financial officer of Midland, Michigan-based Dow, said during a June 14 conference call. “The emerging geographies, led by China and Brazil continue their strong growth, driven by rapidly growing consumer demand and infrastructure investments.” “We expect to see short-term boost in Japan, as that country rebuilds from the recent natural disaster,” he said.
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#1. To: Brian S (#0)
The economic projections through the next election cycle guarantee a GOP President come January 2013.
Bookmarked. {{{chuckle}}}
#3. To: Brian S (#2)
No problem. I honestly hope I'm 100% wrong about this. But here we are in mid June, and guess what? My economic forecast, documented here in the database from 18 months ago, is 100% on target. Again, wish it wasn't so.
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