NEW YORK (Reuters) - The pace of factory activity in the U.S. Mid-Atlantic region ticked up in January, though it was not as strong as expected, a survey showed on Thursday.
The outcome failed to live up to the higher bar set from the firmer Empire State while the Philly index still remains consistent with a moderate pace of activity in manufacturing that is not gaining much traction. Lower new orders also does no favors to the (near-term) outlook.”
FRED DICKSON, CHIEF MARKET STRATEGIST, D.A. DAVIDSON & CO. LAKE OSWEGO, OREGON
“It’s still positive, but probably a tad disappointing given the strength in the Empire State index. The economy is slowly accelerating; we’re not moving fast. We’re moving in the right direction but not with enough speed to create lots of jobs real fast.”
“I don’t worry too much about the week-to-week nuances in the data. I think what the Philly Fed essentially confirms is we’re on the upward path, and rather than argue about the numbers to the right of the decimal point, you can just say it’s confirming there’s a slow, if unspectacular, rebound in manufacturing. It does call into question, along with the drop in jobless claims, why the Federal Reserve is campaigning so hard to get more money out there.”
MARK VITNER, SENIOR ECONOMIST, WELLS FARGO SECURITIES, CHARLOTTE, NORTH CAROLINA
”The manufacturing sector seems to be going into 2012 with some momentum. Inventories are low. There is genuine improvement in the domestic economy. We do expect things to cool off a bit here.
“As we move into the spring, I would be watching exports, which have helped manufacturing and the overall economy expand in the past two years. If the global economy slows, that’s going to cut into manufacturing. Right now it’s too soon to see it in the data right now.”
JOHN DOYLE, CURRENCY STRATEGIST AT TEMPUS CONSULTING IN WASHINGTON
“Obviously it was a little less than forecast. But overall we’re looking at the entire day’s data. We’ve seen a mixed bag. Some of the other prints are going to have a little more effect on the market than the Philly fed. While it didn’t meet forecasts, it still is an uptick from last month. I don’t think it’s going to affect the dollar too much like other prints have. I think we’re still skeptical overall (about the U.S. recovery). We have started to see generally an uptick in the U.S. data. I think what you see is recession pending in the euro zone, and I think the U.K. is going to have it hard fighting off recession there. In comparison it looks good here.”
DAVID ADER, HEAD OF GOVERNMENT BOND STRATEGY, CRT CAPITAL GROUP, STAMFORD, CONNECTICUT
”A bit weaker than expected with downward revision to prior (6.8 versus 10.3), so skewed towards bond friendly even if still in expansion mode. ISM equivalent is just over 51 versus 53.9 in the December read so a precursor of a bit of slowing there. The component we like is New Order minus Inventories which came in to -13.2 versus 22.2 (second highest since ‘09) so again moderation but not weakness.
“And, the (bond) market is a tad firmer on the back of this.”
FRANK DAVIS, DIRECTOR OF SALES AND TRADING AT LEK SECURITIES IN NEW YORK
“Much ado about nothing. Nothing to derive out of the number. People are still looking to the jobless claims and Bank of America. People are looking at the banks to see if loaning capabilities are improving. We’ve had a pretty healthy move, so we’re sort of moving back. These reports aren’t enough to move the market one way or another.”
Americas Economics and Markets Desk