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Economy in Brief

Philadelphia Fed Index Recovered
by Tom Moeller April 15, 2004

The Philadelphia Fed’s April index of general business conditions in the manufacturing sector rose 8.3 points to 32.5 and recovered all of last month's decline. Consensus expectations had been for little change at 25.0.

During the last twenty years there has been a 62% correlation between the level of the Philadelphia Fed Business Conditions Index and quarterly growth in real GDP. The correlation with quarterly growth in factory sector industrial production has been 76%.

A separate survey indicated that the index of expected business conditions in six months fell for the seventh month in eight to 33.6, the lowest level since February 2003.

Amongst the sub indexes, shipments rose sharply to 27.7, adding to the March gain. New orders also improved moderately. The employment index again was roughly stable at 12.2 where it has been for the last three months.

The business conditions index reflects a separate survey question, not the sub indexes.

The prices paid index fell slightly to a still strong 51.9.

The Philadelphia Fed index is based on a survey of 250 regional manufacturing firms, but these firms sell nationally and internationally.

The latest Business Outlook survey from the Philadelphia Federal Reserve Bank can be found here.

Philadelphia Fed Business Outlook April Mar April '03 2003 2002 2001
General Activity Index 32.5 24.2 -6.2 10.6 7.7 -17.2
Prices Paid Index 51.9 53.4 22.0 16.7 12.2 -0.9
Initial Claims for Jobless Insurance Jumped
by Tom Moeller April 15, 2004

Initial claims for jobless insurance jumped 30,000 last week to 360,000 and reversed all of the 13,000 drop the prior week. The prior week's decline was revised slightly shallower. Consensus expectations had been for 330,000 initial claims.

The 4-week moving average of initial claims rose to 344,250 (-18.5% y/y).

Continuing claims for unemployment insurance dropped 22,000 in the week ended 4/3 and the prior week's decline was deepened to 48,000.

The insured rate of unemployment was unchanged at 2.4% for the sixth consecutive week.

From the Federal Reserve Bank of San Francisco is this paper titled "Workplace Practices and the New Economy."

Unemployment Insurance (000s) 04/10/04 4/03/04 Y/Y 2003 2002 2001
Initial Claims    360 330 -17.2% 403 404 406
Continuing Claims    -- 2,980 -16.3% 3,533 3,573 3,023
Empire State Index Improved
by Tom Moeller April 15, 2004

The Empire State Index of General Business Conditions improved in April to 36.05. The 10.72 point m/m rise recouped more than half of the prior month's decline from the record high.

The new orders index jumped sharply and recovered most of the prior month's drop. The shipments index surged to a new series' high. The employment index also improved and recovered most of the prior two months' decline.

The prices paid index surged to 56.19, a series' record.

The April index of expectations for business conditions six months ahead fell to the lowest level in a year. Expectations for capital expenditures improved for the third month in a row.

The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.

Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question, not the components.

For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click here.

Empire State Manufacturing Survey April Mar 4/03 2003 2002 2001
General Business Conditions (diffusion index) 36.05 25.33 -17.20 16.30 7.02 -13.57
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