Global| Apr 21 2005Philadelphia Fed Index Passed the Soft Spot
by:Tom Moeller
|in:Economy in Brief
Summary
The Philadelphia Fed's April Index of General Business Conditions in the manufacturing sector recovered all of the prior month's decline and rose to 25.3. Consensus expectations had been for a lesser increase to 14.0. During the last [...]
The Philadelphia Fed's April Index of General Business Conditions in the manufacturing sector recovered all of the prior month's decline and rose to 25.3. Consensus expectations had been for a lesser increase to 14.0.
During the last ten years there has been a 69% correlation between the level of the Philadelphia Fed Business Conditions Index and three month growth in factory sector industrial production. There has been a 52% correlation with q/q growth in real GDP.
The shipments index more than doubled the prior month's level and rose to its highest since August. The new orders index also rose sharply to the highest level of the year. The number of employees index recovered most of the prior two months' decline. During the last ten years there has been a 64% 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 separate index of expected business conditions in six months improved moderately to the highest level this year.
The prices paid index also recovered much of the prior two months' decline. During the last ten years there has been a 75% correlation between the prices paid index and the three month growth in the intermediate goods PPI. The correlation with the finished goods PPI has been 50% and with the CPI it's been 43%.
The Philadelphia Fed index is based on a survey of 250 regional manufacturing firms, but these firms sell nationally and internationally.
The latest Business Outlook survey from the Philadelphia Federal Reserve Bank can be found here.
| Philadelphia Fed Business Outlook | April | Mar | April '04 | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| General Activity Index | 25.3 | 11.4 | 32.8 | 28.1 | 10.6 | 7.7 |
| Prices Paid Index | 50.5 | 29.7 | 51.3 | 51.3 | 16.8 | 12.3 |
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.
More Economy in Brief
