Global| Aug 23 2016Philadelphia Fed Index of Nonmanufacturing Business Activity Steadies Below Earlier Highs
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Philadelphia reported that its August Index of Nonmanufacturing Sector Activity at the company level remained stable. The index level of 19.5 has been little changed for six months. It remains down sharply, [...]
The Federal Reserve Bank of Philadelphia reported that its August Index of Nonmanufacturing Sector Activity at the company level remained stable. The index level of 19.5 has been little changed for six months. It remains down sharply, however, versus early last year. The expectations index for general activity also has been erratically moving sideways. These diffusion indexes are seasonally adjusted.
The new orders and sales components remained below their 2015 levels. The inventories series fell sharply, however, showing decumulation for the first time since July of last year. Order backlogs also deteriorated.
Hiring also has been lackluster. Even though the full-time permanent employee index rose m/m, it was well below last year's highs. Part-time employment, conversely, has been improving. The wage & benefit cost index has been moving sideways since early last year at levels below the 2014 highs.
The index of prices paid fell sharply to half the levels of the prior three months. Seventeen percent of respondents reported higher prices paid while six percent paid less. The index of prices received also moved sideways, but remained well below earlier highs.
The expectations index for company business in six months was little changed m/m, well below last year's highs.
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) | Aug | Jul | Jun | Aug'15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| General Activity - Company | 19.5 | 20.3 | 17.6 | 28.0 | 31.4 | 38.8 | 29.8 |
| New Orders | 14.7 | 29.6 | 9.4 | 22.5 | 21.7 | 27.9 | 20.2 |
| Sales or Revenue | 22.5 | 22.2 | 15.0 | 27.1 | 23.6 | 30.2 | 27.0 |
| Inventories | -4.2 | 6.7 | 0.6 | 4.3 | 5.2 | 5.8 | 3.0 |
| Number of Full-Time Permanent Employees | 10.0 | 1.9 | 18.3 | 19.0 | 15.6 | 17.3 | 18.8 |
| Prices Paid | 10.6 | 23.3 | 25.7 | 23.8 | 19.3 | 19.7 | 20.6 |
| Expected General Activity - Company | 43.7 | 46.3 | 36.7 | 71.1 | 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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