Activity in the region’s manufacturing sector picked up in September, according to firms polled for this month’s Business Outlook Survey. Indexes for general activity, new orders, and shipments increased, reflecting continued underlying growth. Firms continued to report a rise in prices for inputs, but price increases for finished manufactured goods were not widespread. On balance, the forecast for growth over the next six months has not diminished appreciably, even though, according to responses to special questions this month, over one-quarter of the firms said they are scaling back employment and capital spending plans because of the recent deterioration in the construction industry and uncertainty in financial markets.
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Respondents continue to report higher prices for inputs this month. The prices paid index increased eight points, after edging lower in the previous three months. Thirty percent of the firms reported higher input prices; 7 percent reported lower input prices.
Less than 10% of firms surveyed expected a substantial decline in employment or capital spending as a result of recent developments.
I think I just heard a bond price drop. The 10 year yield stands at 4.63% and climbing.
Four groups are up in the market, gold, commodities, oil and oil services.
Commodity prices and initial unemployment claims reinforce the message of the Philly survey -- where is the economic weakness.
Commodity prices divided by initial unemployment claims is a great leading indicator of the Taylor Rule and Fed Funds and this ratio is saying the Fed should not have eased.
May you live in interesting times.