Today's release of the February Philly Fed report came in weaker than expected. While economists were expecting a reading of 1.1, the actual reading came in at -12.5. Without trying to sugarcoat today's release, we would note that the Philly Fed is a volatile report, where the actual monthly reading routinely either exceeds or misses the consensus forecast by more than ten points. In fact, in each of three prior reports the actual reading either exceeded or missed forecasts by at least eleven points. That being said, there is no escaping the fact that today's report was weak. As shown in the table to the right, only four of the index's nine subcomponents were positive. Making matters worse, the most positive subcomponent of them all was Prices Paid.
The chart below shows the headline Philly Fed report going back to 1980. This morning's reading for February was the lowest since June. As long as the headline index can stay above negative 12.8, the trend of higher lows from the recession lows will remain in place. Keep your fingers crossed!
The charts below show the historical readings of each of the Philly Fed's nine subcomponents. Like the headline index, most of these components have maintained the trend of higher lows that has been in place in the post recession period.