Big miss, Philly Fed Factory report shrinks again to minus 12.9 in July 2012, employment component drops to lowest since Sept. 2009

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7/19/12, "Philly Fed factory activity shrinks for third month in July," Reuters

"Factory activity in the U.S. mid-Atlantic region shrank for a third month in July, though the pace was slightly less severe as new orders improved, a survey showed on Thursday.

The Philadelphia Federal Reserve Bank said its business activity index rose to minus 12.9 from minus 16.6 in June, though it missed economists' expectations for a stronger rebound to minus 8.0.

The forward-looking new orders index gained to minus 6.9 from minus 18.8. Any reading below zero indicates contraction in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.

It is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management.

"We are not seeing much of a rebound from the devastating June number," said Sean Incremona, economist at 4Cast Ltd in New York. ...

U.S. stocks pared gains shortly after the data as investors also took in reports on the housing market and leading economic indicators. Treasuries prices turned positive and the euro extended losses against the dollar.

The employment components showed labor market conditions deteriorated as the gauge of the number of employees dropped to its lowest since September 2009 to minus 8.4 from 1.8. The average work week index contracted again, though it improved a touch to minus 17.3 from minus 19.1....

A tent pole of the U.S. economic recovery, manufacturing has shown signs of wavering and the more comprehensive report from ISM showed the sector shrank last month.

Earlier in the week, data showed manufacturing in New York state picked up in July, though new orders contracted."

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Philly Fed Factory report missed expectations for 4th month in a row:

7/19/12, "Another Double Digit Negative Philly Fed Print Means Fourth Miss In A Row," Zero Hedge

"Every single economic data point keeps coming worse than expected, and the S&P is just shy of 2012 and probably all time (for those who still care about such things) highs. The Philly Fed just posted its July index print which was as usual abysmal, posting its third negative month in a row, coming in at -12.9, and missing expectations of -8.0 for the fourth month in a row. And while the bulk of index subcomponents were more or less in line, the biggest and most notable change by far was the Number of Employees which tumbled from 1.8 to -8.4. Sadly, which the economic contraction accelerates and print after print is horrible, once again they are not nearly bad enough to usher in New QE any second, even as the market has priced in not only QE 4, but 5, 6, and so on."...


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