Global| Jun 21 2016Philadelphia Fed Index of Nonmanufacturing Business Activity Moves Sideways; Prices Surge
by:Tom Moeller
|in:Economy in Brief
Summary
For a third month, the Federal Reserve Bank of Philadelphia reported that its Index of Nonmanufacturing Sector Activity at the company level was fairly steady. The index level of 17.6 compared to 18.2 in May and 17.8 in April, each [...]
For a third month, the Federal Reserve Bank of Philadelphia reported that its Index of Nonmanufacturing Sector Activity at the company level was fairly steady. The index level of 17.6 compared to 18.2 in May and 17.8 in April, each little changed following a decline to 17.5 in March. The measure has been declining since early last year. The expectations index for general activity also deteriorated to the lowest level since February. These diffusion indexes are seasonally adjusted.
Weakness in the overall reading was led by a lower new orders component, which was the weakest since last July. The inventories series also fell sharply showing little accumulation after robust readings in the prior three months. Order backlogs also expanded at a greatly reduced rate and shipments growth eased.
Countering these deteriorations was improvement in hiring, where the full-time permanent employee index rose to its highest level since October. That was accompanied by a decline in the part-time employment series. The wage & benefit cost index remained steady after strengthening in April.
The index of prices paid surged to the highest level in 12 months. Thirty percent of respondents reported higher prices paid while four percent paid less. The index of prices received rose slightly m/m.
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.
Semiannual Monetary Report to the Congress by Federal Reserve Chair Janet L. Yellen is available here.
| Federal Reserve Bank of Philadelphia: Nonmanufacturing Business Outlook Survey (Diffusion Index, SA) | Jun | May | Apr | Jun'15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| General Activity - Company | 17.6 | 18.2 | 17.8 | 45.3 | 31.4 | 38.8 | 29.8 |
| New Orders | 9.4 | 23.1 | 13.9 | 22.0 | 21.7 | 27.9 | 20.2 |
| Sales or Revenue | 15.0 | 23.6 | 9.6 | 26.7 | 23.6 | 30.2 | 27.0 |
| Inventories | 0.6 | 8.9 | 6.5 | 4.0 | 5.2 | 5.8 | 3.0 |
| Number of Full-Time Permanent Employees | 18.3 | 10.6 | 7.5 | 25.5 | 15.6 | 17.3 | 18.8 |
| Prices Paid | 25.7 | 22.4 | 10.9 | 32.3 | 19.3 | 19.7 | 20.6 |
| Expected General Activity - Company | 36.7 | 39.1 | 56.0 | 56.5 | 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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