The June Empire State Manufacturing Index was just released. The latest number is -7.8 which indicates contracting activity in the New York area. The number was 11.9 in May and, according to Market Watch, the consensus view for June had been an increase to 13.3
This is only the latest in the string of numbers coming in way below expectations of "economists" and "experts". And this is not a number that has come in just slightly off. The difference between 13.3 and -7.8 is over 21 points. For the consensus to be off by that much, the either those who form the consensus do not know what they are doing or there is an extraordinary glitch in the numbers. If this were a one time thing, it would just be weird. Unfortunately, for the last two months nearly every economic statistic released has "surprisingly" underperformed the consensus view.
The so-called experts are frequently good at predicting where the indicators will be, but there is one place where they commonly go wrong: when the economy is changing direction. Let's hope this is not the start of a double dip recession, but it is looking more and more like it is.
No comments:
Post a Comment