Recent Updates
- Israel: CPI (Jul), PPI (Jul), Average Housing Prices (Q2)
- Japan: NCI Economic Activity Index (Aug)
- US: NAHB/Wells Fargo Housing Market Index (Aug)
- Canada: Wholesale trade, MSIO (June)
- Pakistan: Foreign Currency Deposits and Utilization (JUL)
- more updates...
Economy in Brief
U.S. Empire State Manufacturing Index Plummets in August; Lowest Since May '20
The Empire State Manufacturing Index of General Business Conditions plunged to -31.3 in August...
U.S. Import and Export Prices Fall in July; Deepest Since April 2020
Import prices fell 1.4% m/m (8.8% y/y) in July...
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...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller January 18, 2018
The Philadelphia Federal Reserve reported that its General Factory Sector Business Conditions Index declined to 22.2 during January from 27.9 in December. Expectations had been for a reading of 25.0 in the Action Economics Forecast Survey. A lessened 34% of firms reported an improvement in business activity while twelve percent reported a decrease. Figures back to 2015 were revised. This statistic is a diffusion index centered on zero. Readings above zero indicate expansion.
Haver Analytics constructs an ISM-Adjusted General Business Conditions Index. This measure fell to 56.5 this month from 57.5 during December. During the last ten years, there has been a 68% correlation between the quarterly ISM-adjusted Philadelphia Fed Index and quarterly real GDP growth.
Weakness in the January series was reflected in lower levels of the new orders, unfilled orders and delivery times indexes. Countering these declines were increases in the shipments and inventories series.
The employment index also fell to its lowest level since September. During the last ten years, there has been an 80% correlation between the index level and the m/m change in payroll employment. Twenty-four percent of respondents reported a rising level of payrolls while eight percent reported a decline. The average workweek series increased to the highest level in three months.
The prices paid index rose slightly but remained near the lowest level in five months. Thirty-three percent of respondents reported higher prices received while none reported lower. The index of prices received increased to the highest level in twelve months.
The future activity index declined to its lowest level since August. New and unfilled orders fell sharply as did inventories and the expected workweek.
The survey panel consists of 150 manufacturing companies in the third Federal Reserve District (which consists 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 ISM-adjusted figure, calculated by Haver Analytics, is the average of five diffusion indexes: new orders, production, employment, supplier deliveries and inventories with equal weights (20% each). Each ISM-adjusted index is the sum of the percent responding "higher" and one-half of the percent responding "same."
The figures from the Philadelphia Federal Reserve can be found in Haver's SURVEYS database. The expectation from the Action Economics Forecast Survey is available in AS1REPNA.
Philadelphia Fed - Manufacturing Business Outlook Survey (%, SA) | Jan | Dec | Nov | Jan'17 | 2017 | 2016 | 2015 |
---|---|---|---|---|---|---|---|
General Factory Sector Business Conditions | 22.2 | 27.9 | 24.3 | 24.1 | 27.4 | 4.8 | 3.7 |
ISM-Adjusted Business Conditions | 56.5 | 57.5 | 57.8 | 56.2 | 57.2 | 48.2 | 49.4 |
New Orders | 10.1 | 28.2 | 24.2 | 24.6 | 25.4 | 4.9 | 3.0 |
Shipments | 30.3 | 23.9 | 23.8 | 24.1 | 26.8 | 6.9 | 3.1 |
Unfilled Orders | -1.8 | 12.8 | 16.6 | 10.2 | 11.9 | -5.6 | -5.1 |
Delivery Time | 6.1 | 11.0 | 15.2 | 5.9 | 10.6 | -4.6 | -4.2 |
Inventories | 9.4 | -1.1 | -5.5 | 11.0 | 2.8 | -9.6 | -1.4 |
Number of Employees | 16.8 | 19.7 | 22.1 | 11.6 | 16.2 | -5.6 | 3.9 |
Average Workweek | 16.7 | 12.6 | 14.9 | 8.9 | 14.9 | -5.4 | -1.7 |
Prices Paid | 32.9 | 27.8 | 36.9 | 31.8 | 30.4 | 13.5 | 1.5 |
Expectations - General Business Conditions; Six Months Ahead | 42.2 | 52.7 | 48.7 | 51.0 | 47.1 | 33.7 | 37.6 |