Global| Sep 20 2016Philadelphia Fed Index of Nonmanufacturing Business Activity Eases; Expectations Improve
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Philadelphia reported that its September Index of Nonmanufacturing Sector Activity at the company level declined to 16.7, the lowest level since July 2015. It remained down sharply versus 53.9 in February [...]
The Federal Reserve Bank of Philadelphia reported that its September Index of Nonmanufacturing Sector Activity at the company level declined to 16.7, the lowest level since July 2015. It remained down sharply versus 53.9 in February 2015. Future improvement may be coming, however, as the expectations index for general activity rose to 52.7, its highest level since November. These diffusion indexes are seasonally adjusted.
Lower new orders and lower shipments readings, as well as a weaker part time employment index, prompted the deterioration in this month's figure. Wage & benefit costs eased to the lowest level in three months. Capital expenditures on equipment and software also fell sharply. The average workweek was fairly stable. Strengthening were the readings for full time employment, as well as prices paid, unfilled orders and inventories.
The reading for general activity in the region eased to the lowest level in three months, but remained up sharply from levels early this year.
The expectations reading at the company level improved to the highest point since April. Expectations for the region rose modestly, up moderately from early this year.
The Philadelphia Fed figures are diffusion indexes which are calculated by subtracting the percent of respondents reporting poorer business conditions from those reporting improvement. Thus, they have a good correlation with growth in the series covered. The data is available in Haver's SURVEYS database.
| Federal Reserve Bank of Philadelphia: Nonmanufacturing Business Outlook Survey (Diffusion Index, SA) | Sep | Aug | Jul | Sep'15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| General Activity - Company | 16.7 | 19.5 | 20.3 | 28.3 | 31.4 | 38.8 | 29.8 |
| New Orders | 10.6 | 14.7 | 29.6 | 22.1 | 21.7 | 27.9 | 20.2 |
| Sales or Revenue | 11.1 | 22.5 | 22.2 | 33.4 | 23.6 | 30.2 | 27.0 |
| Inventories | -1.1 | -4.2 | 6.7 | 3.5 | 5.2 | 5.8 | 3.0 |
| Number of Full-Time Permanent Employees | 19.3 | 10.0 | 1.9 | 10.2 | 15.6 | 17.3 | 18.8 |
| Prices Paid | 29.9 | 10.6 | 23.3 | 20.1 | 19.3 | 19.7 | 20.6 |
| Expected General Activity - Company | 52.7 | 43.7 | 46.3 | 60.0 | 54.0 | 60.1 | 47.4 |
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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