April Philly Fed: Slow growth, elevated inflation

The Philadelphia Fed index for April was just released. It told the same story as other indicators recently -- namely, that growth is weak and inflation is elevated ...

* The overall index came in at -24.9 vs. -17.4 in March and expectations for a reading of -15

* The new orders sub-index slumped -18.8 from -9.3, while the employment sub-index fell to -11.1 from -4.7.

* What about inflation? The prices paid index dipped to 51.6 from 54.4, but the prices received index (an indicator of inflation pass-through) rose to 30.9 from 21.2. That's the highest this sub-index has been since November 2005.

If there was something positive in the report, it's that the business outlook improved. The index that measures how survey respondents feel about the future rose to 13.7 from -0.5 a month earlier.

By the way, we're seeing some more follow-through selling in long bonds this morning after yesterday's technical breakdown. I continue to believe this may be an important shift in the Treasury market -- one that bears close watching. Could the "bond vigilantes" finally be waking up from their long slumber?