The Philly Fed's Hauntingly Bad May Report

by: Karl Denninger

From the Philly Fed...

Responses to the Business Outlook Survey suggest that regional manufacturing activity grew slightly in May. Nearly all of the surveys broadest indicators remained positive but fell from their readings in the previous month. The current employment index, however, showed resilience and improved this month. Indicators for prices fell back somewhat from their relatively high readings of recent months but still suggest considerable price pressure. The survey's indicators of future activity fell sharply this month, reflecting consensus about future growth.

Note very carefully the levels here on both current and forward expectations and how they align with the entry into the last "official" recession declaration.

For the first time in eight months, firms reported that unfilled orders and delivery times were falling - both indexes were slightly negative this month.

This is where it begins folks.

And to go with it, the LEIs decreased:

The Conference Board Leading Economic Index (LEI) for the U.S. declined 0.3% in April to 114.0 (2004 = 100), following a 0.7% increase in March, and a 0.9% increase in February.