Global| Oct 20 2005Philadelphia Fed Activity Index Recovered
by:Tom Moeller
|in:Economy in Brief
Summary
The October Index of General Business Conditions in the manufacturing sector from the Philadelphia Fed recovered just about all of the prior month's loss. A surge to 17.3 from 2.2 in September compared to Consensus expectations for a [...]
The October Index of General Business Conditions in the manufacturing sector from the Philadelphia Fed recovered just about all of the prior month's loss. A surge to 17.3 from 2.2 in September compared to Consensus expectations for a lesser gain to 10.0.
During the last ten years there has been a 68% correlation between the level of the Philadelphia Fed Business Conditions Index and three month growth in factory sector industrial production. There has been a 50% correlation with q/q growth in real GDP.
The sub index measuring new orders led the improvement and rose to 18.6 from -0.5 while the shipments index improved moderately to 19.5 from 13.2. The index covering the number of employees surged to 17.0 and landed at the highest level since January. During the last ten years there has been a 64% 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 separate index of expected business conditions in six months recovered more than half of the prior month's decline and rose to 22.0.
The prices paid index jumped to the highest level since January. During the last ten years there has been a 75% correlation between the prices paid index and the three month growth in the intermediate goods PPI. The correlation with the finished goods PPI has been 50% and with the CPI it's been 43%.
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.
| Philadelphia Fed Business Outlook | Oct | Sept | Oct '04 | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| General Activity Index | 17.3 | 2.2 | 27.2 | 28.1 | 10.6 | 7.7 |
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.
More Economy in Brief
