Global| Apr 17 2008Philadelphia Fed Index Down Again
by:Tom Moeller
|in:Economy in Brief
Summary
The Philadelphia Federal Reserve Bank reported that its April Index of General Business Conditions in the manufacturing sector fell to -24.9% and reversed all of the prior month's modest improvement. The latest level was the lowest [...]
The Philadelphia Federal Reserve Bank reported that its April Index of General Business Conditions in the manufacturing sector fell to -24.9% and reversed all of the prior month's modest improvement. The latest level was the lowest since the recession year 2001.
The Philadelphia Fed constructs a diffusion index for total business activity and each of the sub indexes. The business conditions index reflects a separate survey question, not the sub indexes listed below.
During the last ten years there has been a 59% correlation between the level of the Philadelphia Fed Business Conditions Index and the three-month growth in factory sector industrial production. There has been a 42% correlation with q/q growth in real GDP.
Sharp declines in the new orders, employment and in the inventories sub indexes were registered while shipments fell modestly.
The prices paid index backed off slightly after rising in March to its highest level since January 2005. During the last ten years there has been a 76% correlation between the prices paid index and the three-month growth in the intermediate goods PPI. There has been an 85% correlation with the change in core intermediate goods prices.
The separate index of expected business conditions in six months rose sharply and was at the highest level since November; positive for the first month in the last three. Expectations for new orders rose sharply
The latest Business Outlook Survey from the Federal Reserve Bank of Philadelphia can be found here.
The Changing Business of Banking: Implications for Financial Stability and Lessons from Recent Market Turmoil is today's speech by Federal Reserve Vice Chairman Donald L. Cohn and it is available here.
The Economic Logic of a Fresh Start, which examines personal bankruptcy filings, from the Federal Reserve Bank of Philadelphia can be found here.
| Philadelphia Fed (%) | April | March | April '07 | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|
| General Activity Index | -24.9 | -17.4 | -0.8 | 5.1 | 8.1 | 11.5 |
| Prices Paid Index | 51.6 | 54.4 | 27.6 | 26.4 | 36.6 | 40.1 |
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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