Manufacturers See a Deal
The Philly Fed Manufacturing report came in slightly below consensus, but inside the data is a development that I think is bigger than the headline miss – it looks like manufacturing sees a deal on the China trade front.
All the major categories, including general activity, new orders and work week, are sharply lower this month, and conversely, sharply higher looking six months out.
Right now manufacturers are lowering work weeks because they don’t want to lose high skilled talent, as it would cost a lot more to train new workers in the future.
You don’t have to be a chartist to see the sharp and very rare divergence in between how manufacturers feel now versus their optimism about the future. My interpretation is many are seeing a true trade deal being signed, sealed and delivered in the next six months.
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