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Economy in Brief

Philadelphia Fed Nonmanufacturing Survey Improves
by Tom Moeller  September 22, 2015

The Federal Reserve Bank of Philadelphia reported that its Index of Nonmanufacturing Sector Activity rose to 29.3 and stood at the highest level in three months. Nevertheless, the reading was the third consecutive figure below the level one year earlier. For Q3 2015 altogether, the index stood at 17.6, the lowest level since Q1 2013. These diffusion indexes are not seasonally adjusted.

Improved readings for new orders, sales and capital expenditures on plant and equipment accounted for much of the rise in the overall September index average. On the labor front the readings were mixed. Part-time payrolls, the length of the workweek and wage & benefits improved but full time employment posted the weakest reading since February 2014. Unfilled orders and inventories also eased. Finally, prices paid and received fell.

The expectations reading for the region improved slightly m/m but remained near the middle of the range since 2013. The expected company, general activity reading eased m/m but remained near the highest level since 2012.

The Philadelphia Fed figures are diffusion indexes which are calculated by subtracting the percent of respondents reporting poorer business conditions from those reporting improvement. Thus, they have a good correlation with growth in the series covered. The data is available in Haver's SURVEYS database.

Can We Rely on Market-Based Inflation Forecasts? from the Federal Reserve Bank of San Francisco can be found here.

Federal Reserve Bank of Philadelphia: Nonmanufacturing Business Outlook Survey (Diffusion Index, NSA) Sep Aug Jul Sep'14 2014 2013 2012
General Activity - Region 29.3 15.4 8.1 42.9 35.9 25.2 22.5
  New Orders 22.0 10.3 -5.4 31.0 28.0 20.2 20.2
  Sales or Revenue 34.1 5.1 -21.6 28.6 30.4 27.2 19.4
  Number of Full-Time Permanent Employees 4.9 15.4 5.4 16.7 17.4 19.0 12.7
  Prices Paid 12.2 23.1 18.9 11.9 19.7 20.6 20.7
Expected General Activity - Region 80.5 79.5 81.1 88.1 83.6 80.9 73.3
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