Philly Fed Plunges Into Contraction For First Time Since COVID Lockdowns

Another day, another disappointing macro data point in the US economy. While ‘hard’ data has been tumbling, we now see the usual optimism-filled ‘soft’ survey data giving up hope as Philly Fed’s business barometer plunged into contraction in June (from +2.6 to -3.3), notably missing expectations of a small rebound to +5.0.

This is the first contraction since the COVID lockdowns of 2020…

Source: Bloomberg

Looking into the details, we see that new orders contracted dramatically, as did the workweek as backlogs are worked through:

• June prices paid fell to 64.5 vs 78.9

• New orders fell to -12.4 vs 22.1

• Employment rose to 28.1 vs 25.5

• Shipments fell to 10.8 vs 35.3

• Delivery time fell to 9.9 vs 17.5

• Inventories fell to -2.2 vs 3.2

• Prices received fell to 49.2 vs 51.7

• Unfilled orders fell to -7.0 vs 17.9

• Average workweek fell to 11.8 vs 16.1

And most troubling of all, the six-month outlook fell to -6.8, its weakest since 2008…

Source: Bloomberg

The Philly Fed is leading the way lower in June across regional Fed surveys…

Source: Bloomberg

Is this what Powell wants?