US: Philly Fed Manufacturing Index slumps to -56.6 in April vs. -30 expected

The headline Diffusion Index of the Federal Reserve Bank of Philadelphia’s Manufacturing Business Outlook Survey plummeted to -56.6 in April from -12.7 in March. This reading missed the market expectation of -30 by a wide margin.

Additional takeaways

“This is the current activity index’s lowest reading since July 1980.”

“The percentage of firms reporting decreases (60%) this month far exceeded the percentage reporting increases (4%).”

“The index for new orders fell further into negative territory, from -15.5 to -70.9, its lowest reading ever.”

“Unfilled orders fell 6 points further into negative territory, while delivery times rose 13 points to 4.1, suggesting longer delivery times.”

“Despite the current weakened conditions, the respondents remained optimistic about growth over the next six months. The diffusion index for future general activity rose 8 points to 43.0, mostly offsetting a 10 point decline last month.”

Market reaction

US stock index futures pulled away from daily highs but continue to add around 0.5% on the day to suggest that Wall Street is likely to open modestly higher.