Global| Oct 25 2016Philadelphia Fed Index of Nonmanufacturing Business Is Steady; Expectations Sag
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Philadelphia reported that its October Index of Nonmanufacturing Sector Activity at the company level was little changed at 16.3, the lowest level since July 2015. It remained down sharply versus 53.9 in [...]
The Federal Reserve Bank of Philadelphia reported that its October Index of Nonmanufacturing Sector Activity at the company level was little changed at 16.3, the lowest level since July 2015. It remained down sharply versus 53.9 in February 2015. The expectations index for general activity at the company level fell back to 40.4, its lowest level since June. These diffusion indexes are seasonally adjusted.
Declines in the component readings were broad-based. Lower new orders and lower shipments, as well as a weaker full-time employment index and hours-worked, prompted the deterioration in this month's figure. The part-time employment reading remained depressed. Wage & benefit costs rebounded to the highest level since October 2014. Capital expenditures on equipment and software increased after a sharp September decline.
The prices paid series reversed most of its improvement last month.
Regional general activity eased to the lowest point since June. Expectations for the region were down slightly following strength earlier 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) | Oct | Sep | Aug | Oct'15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| General Activity - Company | 16.3 | 16.7 | 19.5 | 35.6 | 31.4 | 38.8 | 29.8 |
| New Orders | 5.7 | 10.6 | 14.7 | 24.2 | 21.7 | 27.9 | 20.2 |
| Sales or Revenue | 6.0 | 11.1 | 22.5 | 17.9 | 23.6 | 30.2 | 27.0 |
| Inventories | 7.6 | -1.1 | -4.2 | 6.9 | 5.2 | 5.8 | 3.0 |
| Number of Full-Time Permanent Employees | 8.5 | 19.3 | 10.0 | 23.1 | 15.6 | 17.3 | 18.8 |
| Prices Paid | 15.0 | 29.9 | 10.6 | 17.1 | 19.3 | 19.7 | 20.6 |
| Expected General Activity - Company | 40.4 | 52.7 | 43.7 | 56.8 | 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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