Global| Nov 16 2006Philadelphia Fed Index Improved Slightly
by:Tom Moeller
|in:Economy in Brief
Summary
The Philadelphia Federal Reserve Bank's Index of General Business Conditions in the manufacturing sector matched expectations and improved slightly in November after two months in negative territory. At 5.1, the figure compares with [...]
The Philadelphia Federal Reserve Bank's Index of General Business Conditions in the manufacturing sector matched expectations and improved slightly in November after two months in negative territory. At 5.1, the figure compares with -0.7 and -0.4 during October & September but remained well below the average of 12.0 during the prior eight months.
During the last ten years there has been a 65% correlation between the level of the Philadelphia Fed Business Conditions Index and three month growth in factory sector industrial production. There has been a 43% correlation with q/q growth in real GDP.
The sub indexes for shipments, unfilled orders, delivery times and the workweek each improved moderately, however, new orders and inventories fell. In addition, the employment index fell to near zero. During the last ten years there has been a 75% 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 prices paid index fell for the eighth month this year to the lowest 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 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 fell and retraced one quarter of the prior month's improvement.
The latest Business Outlook survey from the Philadelphia Federal Reserve Bank can be found here.
Today's comments by Chicago Federal Reserve Bank President Michael H. Moskow can be found here.
| Philadelphia Fed Business Outlook | November | October | Nov. '05 | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| General Activity Index | 5.1 | -0.7 | 10.7 | 12.4 | 28.0 | 10.5 |
| Prices Paid Index | 26.7 | 32.0 | 55.1 | 43.5 | 51.2 | 16.8 |
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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