Global| Nov 19 2004Philadelphia Fed Activity Index Eased
by:Tom Moeller
|in:Economy in Brief
Summary
The Philadelphia Feds November index of general business conditions in the manufacturing sector eased to 20.7 from 28.5. A decline to 23.2 had been the Consensus expectation. During the last ten years there has been a 71% correlation [...]
The Philadelphia Fed’s November index of general business conditions in the manufacturing sector eased to 20.7 from 28.5. A decline to 23.2 had been the Consensus expectation.
During the last ten years there has been a 71% correlation between the level of the Philadelphia Fed Business Conditions Index and three month growth in factory sector industrial production. There has been a 53% correlation with q/q growth in real GDP.
Most of the sub indexes declined with the notable exception of the index for the number of employees which rose to 17.4 and recovered most of the prior month's.
The business conditions index reflects a separate survey question, not the sub indexes.
The separate index of expected business conditions in six months reversed virtually all of the prior two months' declines with a 24.5 point jump to 52.1. That was still off the highs last year in the 60s.
The prices paid index fell to 53.9. Expectations for prices rose to the highest level since March. During the last ten years there has been a 76% correlation between the prices paid index and the three month growth in the PPI for intermediate goods. The correlation with the finished goods PPI has been 41% and with the CPI it's been 45%.
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.
Today's comments by Fed Chairman Greenspan on the Euro can be found here.
| Philadelphia Fed Business Outlook | Nov | Oct | Nov '03 | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| General Activity Index | 20.7 | 28.5 | 27.9 | 10.6 | 7.7 | -17.2 |
| Prices Paid Index | 53.9 | 57.1 | 26.2 | 16.7 | 12.2 | -0.9 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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