The Empire States Manufacturers Surver General Business Conditions Index was released today, tumbling to 2.55! The consensus was 23.51. This is a huge miss.
To make matters worse, the PPI came in at 1.8%, much higher than the 1.0% expected. Excluding food and energy (as if people don't need to eat or heat their homes), the PPI was 0.5% (versus 0.2% expected).
"We got the worst of both for this morning's initial economic news. Producer prices surged while Empire manufacturing fell back sharply. Energy costs jacked up the headline PPI for November but the core also rose significantly. The overall PPI jumped 1.8 percent in November after gaining 0.3 percent in October. The boost in the latest month far exceeded the market forecast for a 1.0 percent increase. The November gain was led by a 6.9 percent spike in energy and a 0.5 percent gain for food. At the core level, the PPI rebounded 0.5 percent after a huge 0.6 percent drop in October. The market had projected a 0.2 percent rise for the latest month. It is easy to jump on the worry wagon about inflation from today's report. But there should be a little caution about that. Oil prices have since come down and the jump in the core partly or mostly reflected getting back to near-term trend after October's sharp drop. The core rebound was mainly for light trucks and cigarettes".
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