Philly Fed prone to unusual swings

Before we all get too excited about the drop in the Philly Fed, lets remember that this isn't the first time that it's diverged from the ISM manufacturing index.

• Employment -1.3 vs +17.9 prior
• New orders -1.2 vs +2.7 prior
• Six-months future business conditions +15.0 vs +33.8 prior

The details of the report are worrisome but it's unlikely that manufacturing dropped off a cliff in May.