Surveys, which pundits use to pump the market, are coming in bad with the Philly Fed’s June 2011 Business Outlook Survey matching the ugly numbers of the NY Fed’s Empire State Manufacturing Survey (analysis here).
Surveys are supposed to be a peek at the future, but Econintersect continues to warn these are no more than interesting bar room talk. This is not data but opinion which leads hard data by a month or so.
In the case of the Philly Fed survey, this is the third monthly drop in a row.
To be sure this is the lowest reading since the recession ended and mirrors the survey dip seen one year ago. But this index quantifies opinion of many factors and Econintersect believes some of these might not be significant forces at this point.
As a matter of interest, more companies say they are hiring than firing – even the workweek is higher for more companies then companies who are cutting back. This is inconsistent with a negative survey.
Econintersect believes the important elements of this survey are new orders and unfilled orders. The number of respondents who thought new orders and unfilled orders were improving fell this month but are remaining in the range seen since the recession ended.
Since the recession ended, there has been only one other time that this Philly Fed survey was down three months in a row – and the severity of this three month decline is worse.
Surveys are NOT hard data. It is a quantification of opinion. Econintersect believes the economy is slowing – this survey is saying the economy is contracting.
Industrial Production Downtrend Continues in May 2011 by Steven Hansen
Empire State Manufacturing Survey Is Pretty Bad by Steven Hansen
April 2011 Manufacturing Data is Really Bad by Steven Hansen
Terrible Data Week: Is Inflation the Cause? by Steven Hansen
April 2011 Durable Goods Suggest Economic Cycle Change by Steven Hansen
April 2010 Economic Forecast: Likely at Sub-Cycle Peak by Steven Hansen
Consumers Come to Terms with Frugality by Rick Davis
Business Sales Up Strongly in March 2011 by Steven Hansen