Philly Fed Adds Evidence US Business Sector In Recession

Manufacturing activity likely contracted through the third quarter; and now October data is already reflecting far worse conditions for the final months of the year. Following up on the record low from the New York - Empire factory survey, today's Philadelphia regional activity gauge plunged from a modest 3.8 reading to -37.5. Not only was this the biggest monthly change on recent record, but the overall level is just above its worst reading since October of 1980. Looking at the indicators' components, the prices paid reading was the only notable improvement. The new orders, future outlook and employment figures all dropped sharply. Put into context with the industrial production figure from last month (reported earlier today), this is a strong argument for one more driver for a US recession. The consumer is being increasingly burdened with keeping the US from a crippling contraction.

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