Philadelphia Fed Business index for May -4.0 vs -11.0 expected

• Prior month was -26.4

Details:

• New Orders 7.5 vs -34.2 last month
• Shipments -13.0 versus -9.1 last month
• Unfilled orders 4.9 versus -1.1 last month
• Delivery time -9.2 versus -2.6 last month
• Inventories 9.7 versus -0.9 last month
• Prices paid 59.8 versus 51.0 last month
• Prices received 43.6 versus 30.7 last month
• Number of employees 16.5 versus 0.2 last month
• Average workweek 2.0 versus -12.7 last month

This is a strong bounce back as trade uncertainty abated and positive expectations increased. I would expect even more improvement in the next months.

The 6-months forward index jumped from 6.9 to 47.2 and the new orders one from 6.6 to 49.7. This just shows that we could really get a covid-like bullwhip scenario where we see a surge in demand and economic activity after the April’s rout.

This article was written by Giuseppe Dellamotta at www.forexlive.com.