Philly Fed & Leading Indicators Show More Risk Of Slowdown

The woes of Europe and the slowing of growth in the BRIC nations is starting to show up more and more in the economic numbers being reported and this will act to support the recent drop in the stock market.  It feels like the “Sell in May and go away” trend may have been right after all in 2012 just as it was in the last two years.  Today’s weekly jobless claims did not offer much insight, but the Philadelphia Federal Reserve activity index and the so-called “Leading Indicators” are showing more concern about U.S. growth.

The Philadelphia Fed’s manufacturing survey showed that the pace of growth fell from a higher growth rate in recent months, while the survey’s broad indicators for general activity fell into negative territory for the first time in eight months. The reading came in at -5.8 as prices paid and received fell sharply in the report.  Bloomberg had the consensus for Philly Fed at 10.0 and the range of estimates was 5.0 to 13.0 for this report.

The Conference Board’s report on Leading Indicators for April fell by 0.1% after being up by 0.3% in March.  Bloomberg had estimates of 0.1% for the leading indicators, and the range of estimates was 0.0% to 0.3% for the report.  This last month had only five of the ten indicators in the positive, although its coincident index did manage to rise by 0.2%.  Delivery times were the worst drag and this was the first negative report in eight months.

The equity markets were all lower ahead of the data and these reports do not exactly signal any great confidence.

JON C. OGG