Recent Updates
- North Macedonia: Loans Granted to Households (Jul)
- Retail & Wholesale Trade (Jun)
- Mexico: Service Sector (Jun)
- Zambia: External Debt (Q2)
- Slovenia: PPI (Jul)
- more updates...
Economy in Brief
U.S. Index of Leading Indicators Fell Again in July
The Conference Board's Composite Leading Economic Indicators Index fell 0.4% m/m...
U.S. Philly Fed General Activity Index Back to Positive Reading in August
The current general activity diffusion index rose nearly 19 points in August to 6.2...
U.S. Unemployment Claims Slightly Lower
Initial claims for unemployment insurance went down 2,000 in the week ended August 13 to 250,000...
Inflation Rages in EMU and Hovers Globally
Inflation in the European Monetary Union in July finalizes at 8.8% year-over-year...
U.S. Retail Sales Hold Steady in July; Nonauto Sales Rise
Total retail sales remained unchanged during July (10.3% y/y)...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller December 20, 2007
The Philadelphia Federal Reserve Bank reported that it's Index of General Business Conditions in the manufacturing sector plunged this month to -5.7. The decline into negative territory was to the lowest level since June 2003.
The index is a diffusion index for each component or series. It reflects the increase in activity reported less the decrease.
During the last ten years there has been a 59% correlation between the level of the Philadelphia Fed Business Conditions Index and the three-month growth in factory sector industrial production. There has been a 42% correlation with q/q growth in real GDP.
The decline did not represent broad based weakness amongst the sub indexes. In fact new orders, shipments, unfilled orders and vendor deliveries each rose. However, the inventories and the employment indexes fell. During the last ten years there has been a 75% 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 prices paid index fell and reversed increases during the prior two months. During the last ten years there has been a 76% correlation between the prices paid index and the three-month growth in the intermediate goods PPI. There has been an 85% correlation with the change in core intermediate goods prices.
The separate index of expected business conditions in six months fell further and added to its plunge during November. The latest was the lowest reading in twelve months. Expectations for new orders plummeted but expectations for the number of employees rose.
The latest Survey of Professional Forecasters from the Federal Reserve Bank of Philadelphia is available here.
December | November | Dec. 06 | 2007 | 2006 | 2005 | |
---|---|---|---|---|---|---|
General Activity Index | -5.7 | 8.2 | 5.4 | 5.1 | 8.1 | 11.5 |
Prices Paid Index | 35.0 | 37.7 | 25.2 | 26.3 | 36.6 | 40.1 |