Like the Empire report for New York before it, today’s release of the Philly Fed Manufacturing report for October was negative and came in weaker than expected. While economists were forecasting the headline reading to come in at a level of -2.0, the actual reading came in at -4.5. Looking on the bright side, October’s reading was less bad than September.
Where there was little in the way of silver linings, though, was in the internals of the report. As shown in the table to the right, the only component of Thursday’s report that didn’t show deterioration was Prices Received. Every other category in the report showed weakness, with the biggest declines coming in Shipments and New Orders which were both down over 20 points. Since 1980, there have only been four other months where both components dropped 20 or more points in the same month (Oct. 1981, Jan. 1988, Jan. 2001, and Jan. 2008). Of those occurrences, the only one that didn’t occur during or right before a recession was January 1988. Granted, manufacturing is not nearly as large a part of the economy as it once was, but these kinds of declines certainly aren’t positive.