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Economy in Brief
UK Consumer Sentiment Hits Lowest Reading since 1996
(when the GFK survey began; also lowest reading 'ever')
Of these 13 readings eight of them declined on the month in May three of them improved and two of them were unchanged...
U.S. Existing Home Sales Continue to Fall in April as Houses Become Less Affordable
The combination of soaring home prices across the nation and rising interest rates is making homes less affordable...
U.S. Index of Leading Indicators Fell in April
Five of the index's components fell in April, one was unchanged and four increased...
U.S. Unemployment Claims Rose in the Latest Week
The state insured rates of unemployment in regular programs vary widely...
CBI Gauge in the UK Continues to Be Upbeat
The global economy has a lot of challenges...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
Profits and Margins Plunge In Q1: Expect More Margin Contraction As Fed Squeezes Inflation
The Many Links of Inflation Cycle: Hard Landing Is Needed to Crack Them
Peak Inflation and Fed Policy: A Relationship which Should Worry the Fed and Scare Investors
Why Have the Yields on TIPS Been Negative in the Past Two Years?
by Tom Moeller April 19, 2012
The Philadelphia Federal Reserve Bank's General Business Conditions Index slipped last month to 8.5 from 12.5 in March. Nevertheless, positive numbers for the last seven months indicate expansion in activity. The latest reading was lower than Consensus expectations for 12.0. Haver Analytics constructs an ISM-adjusted reading of the Philadelphia number. This figure rose to 52.4 this month, its highest level since November. During the last ten years there's been a 73.0% correlation between the level of the Philadelphia Fed Business Conditions Index and the three-month growth in factory sector industrial production. There's also been a 76% correlation with q/q growth in real GDP.
Monthly changes were varied amongst the component series. To the downside were the figures for new orders, shipments and the length of the workweek. Improving were the readings for unfilled orders, inventories, delivery times and employment. During the last ten years there has been an 86% correlation between the employment figure and the m/m change in factory sector payrolls. Also improving slightly was the reading of prices paid. Twenty-seven percent of firms paid higher prices while five percent paid less. During the last ten years there has been a 70% correlation between the prices paid index and the three-month growth in the intermediate goods PPI.
The separate index of expected business conditions in six months improved slightly. That made up a March decline but the figure remained well below its January high.
The survey panel consists of 150 manufacturing companies in Federal Reserve District III (consisting of southeastern PA, southern NJ and Delaware.) The diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease in activity. The figures from the Philadelphia Federal Reserve can be found in Haver's SURVEYS database. The Consensus expectations figure is available in AS1REPNA.
Philadelphia Fed (%) | Apr | Mar | Feb | Apr'10 | 2011 | 2010 | 2009 |
---|---|---|---|---|---|---|---|
ISM-Adjusted General Business Conditions | 52.4 | 50.3 | 51.2 | 55.6 | 51.9 | 50.7 | 41.2 |
General Business Conditions | 8.5 | 12.5 | 10.2 | 15.1 | 7.7 | 12.1 | -7.6 |
New Orders | 2.7 | 3.3 | 11.7 | 15.3 | 7.1 | 5.5 | -9.5 |
Shipments | 2.8 | 3.5 | 15.0 | 25.2 | 9.9 | 8.3 | -7.9 |
Unfilled Orders | 3.2 | -11.0 | 2.2 | 10.2 | -0.9 | -3.0 | -15.2 |
Delivery Time | -3.4 | -7.1 | 1.5 | 7.4 | -0.4 | 0.9 | -15.2 |
Inventories | 8.2 | 0.9 | -12.9 | 1.5 | -0.4 | -5.0 | -24.0 |
Number of Employees | 17.9 | 6.8 | 1.1 | 14.0 | 11.0 | 4.6 | -23.8 |
Prices Paid | 22.5 | 18.7 | 38.7 | 54.4 | 38.6 | 28.8 | -3.6 |