The good news is that the 2.3% of the drop is due to Hurrican Ike taking out the Houston-Gulf Coast economy. And the remaining 0.5% of the drop is the Boeing strike. The bad news is that in the midst of the great economic “repricing” these two real shocks are playing out as well.
The Philly FED Index reads -37.5 down from +3.8 which managed to wipe out the early gains on the stock market. The weak Dollar, that was sheltering US manufacturing has been reversed in the great deflation (buy dollars, sells equities sell commodities)
key new orders index dropped to -30.5 from 5.6, and there were steep declines in shipments, delivery times and employment.
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