Tuesday, January 17, 2012

New York Manufacturing Index very impressive

I usually don't pay much attention to regional Fed manufacturing surveys, but today's Empire State survey caught my eye, and Mark Perry's comments were compelling. This chart shows the six-month outlook for general business conditions, and it has brightened significantly in the past two months, about on par with the improvement we saw just prior to the economy's emergence from the 2008-9 recession. Add this to the growing list of improving economic fundamentals in the U.S. economy, contrast that to the still-gloomy assumptions priced into equity markets and Treasury yields, and you begin to understand why the equity market is moving grudgingly higher, as I explained in greater detail last week.


Cabodog said...

Scott, this echoes exactly what we are seeing on main street. Our business has experienced a huge uptick in activity (bid requests and contracts) in the last two months.

In addition, our bank's loan officer commented that their bank has seen a huge uptick in loan requests (his exact words: "I've never seen it like this"). He detailed the loan requests and they all point to businesses and individuals willing to take more risk, meaning increasing faith in the recovery.

The virtuous cycle is taking hold.

Scott Grannis said...

Cabodog: thanks for the input from the front lines, which dovetails nicely with the significant increase in C&I loans that I've been documenting over the past six months.

Benjamin Cole said...


Geographically, where are you?

John said...

There is a company here in Michigan planning to build flat screen TVs - in Michigan. How could a blue union state possibly compete with Asian electronics labor?


Scott Grannis said...

John: that is the beauty of a free market system. It always seems to find a solution that eludes the best of individual minds.