Recent Updates
- US: Consumer Sentiment (Aug-prelim), Import/Export Prices (Jul)
- US: Consumer Sentiment Detail (Aug-prelim)
- US: Vehicle Miles Driven by State (Jun)
- Bulgaria: Agricultural PPI (Q2) Central Bank Survey (Jul)
- Blue Chip: Blue Chip Economic Indicators (Aug)
- more updates...
Economy in Brief
U.S. Housing Affordability Declines Further in June
The NAR Fixed Rate Mortgage Housing Affordability Index fell 3.6% in June...
EMU Output Makes Solid Gain in June
The European Monetary Union posted a 0.7% increase for industrial output in June...
U.S. Producer Prices Fall During July; Core Increase Weakens
The Producer Price Index for Final Demand fell 0.5% during July...
U.S. Unemployment Claims Continue on an Uptrend
Initial claims for unemployment insurance filed in the week ended August 6 rose 14,000 to 262,000...
RICS Survey Points to More U.K. Housing Sector Weakness
The survey of housing market conditions in the U.K. continues to show strength in prices versus weakness...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller August 18, 2005
The Index of General Business Conditions in the manufacturing sector in August from the Philadelphia Fed added to the prior month's gain and rose to 17.5, the highest level since April. Consensus expectations had been for a lesser improvement to 14.0.
During the last ten years there has been a 68% correlation between the level of the Philadelphia Fed Business Conditions Index and three month growth in factory sector industrial production. There has been a 50% correlation with q/q growth in real GDP.
The sub indexes measuring new orders and shipments led with gains to the highest levels since April. The index covering the number of employees also rose. During the last ten years there has been a 64% correlation between the employment index and the three month growth in factory payrolls.
The business conditions index reflects a separate survey question, not the sub indexes.
The separate index of expected business conditions in six months jumped to its best level this year led by expectations of increased hiring.
The prices paid index slipped and gave back a piece of the moderate improvement in July. During the last ten years there has been a 75% correlation between the prices paid index and the three month growth in the intermediate goods PPI. The correlation with the finished goods PPI has been 50% and with the CPI it's been 43%.
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 | Aug | July | Aug '04 | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
General Activity Index | 17.5 | 9.6 | 29.2 | 28.1 | 10.6 | 7.7 |
Prices Paid Index | 25.9 | 26.5 | 54.3 | 51.3 | 16.8 | 12.3 |