Latest Stagflation Data

Last week, the week before and now with the only tier 1 US data released today, this week we have more proof of the US economy and specifically manufacturing, going deeply in to stagflation.

The F_E_D Empire State Manufacturing Survey...
Released On 9/17/2012 8:30:00 AM For Sep, 2012

	Prior	Consensus	Consensus Range	Actual
General Business Conditions Index - Level	-5.85	-2.00	-10.00  to 5.00	-10.41

Another big headline miss for manufacturing printing at -10.41 on consensus on -2.0 and below even the lowest consensus estimate. Today's print is down from the previous of -5.85 and is the lowest print since April 2009 (notice how all of these surveys and data points are the worst  since the early to mid 2009 era?); this is also the biggest drop in 6 months since the Survey first began keeping records.

As always, the devil is in the details and they point again to the dichotomy in the F_E_D's recently released QE3 policy as the F_E_D can only hope some of these stagflationary numbers (especially on the inflation side) are transitory as they call all rises in inflation. The sub-indicies point to more trouble than just the crushing headline print, for instance the Employment Index dropped from 16.47 to 4.26! As seen in the ISM Manufacuturing data, New Orders dropped hard from -5.5 to -14.03, confirming manufacturing everywhere is losing all demand and existing shipments fell as well. It should be noted the New Orders index was positive until July when it went negative around -2 , so the acceleration is picking up. However it gets worse, Prices Paid (raw materials), just as with the ISM manufacturing Input Costs data, rose from 16.47 to 19.15 confirming not only an accelerating slowdown in manufacturing, but inflationary pressures at the same time which is called "Stagflation".