While jobless claims look rosy, Philly Fed’s employment index plunged by the most since May 2013 as the headline survey extended its period of sub-50 contraction to six straight months – the longest streak outside of a recesssion in history. Across the board the underlying components were weak with current all tumbling led a collapse in average workweek, employment, and new orders. Worse still, the “hope” index plunged to its lowest since Nov 2012.

6 straight months of contraction flash red for recession…

The underlying components were a disaster…

As hope plunged…

The diffusion index for future general activity fell from a reading of 19.1 in January to 17.3 this month. The index has trended down since last summer and is now at its lowest reading since November 2012 (see Chart 1). The largest share of firms expects an increase in activity over the next six months (42 percent), but 25 percent expect declines. The future indexes for new orders and shipments also edged down slightly this month. Firms’ forecasts for future employment have been moderating the past few months. The future employment index fell from 5.5 to 2.3 this month, the third consecutive decline. The future workweek index also declined into negative territory for the first time in six months.

Charts: Bloomberg