Global| Feb 20 2018Philadelphia Fed Nonmanufacturing Business Activity Strengthens
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions at the company level increased to 32.1 in February from 29.3 during January. It was the highest index level since April. Forty-six [...]
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions at the company level increased to 32.1 in February from 29.3 during January. It was the highest index level since April. Forty-six percent of respondents reported an increase in current activity while 14% reported a decline. The expectations index at the company level for February eased to 58.5, but remained up from October's low of 41.7.
The sales or revenue index rose to the highest level in eight months. Unfilled orders index surged to the highest level since June 2014, as inventories accumulated at the strongest rate since January 2017. The new orders index eased. The number of full-time permanent employees recovered sharply after its January decline, but the index of part-time/temporary employment backpedaled. The average workweek reading fell to the lowest level since October 2016. The capital expenditures on facilities index reversed its January increase, falling to the lowest level since November 2016, while spending on equipment and software eased slightly.
The index of prices paid fell sharply, but remained stronger than its March 2016 low. A greatly lessened 26% of respondents paid higher prices while two percent paid less. The prices received index retraced a bit of its January surge, but the wages & benefits index moved slightly higher.
The Philadelphia Fed figures are diffusion indexes which are calculated by subtracting the percent of respondents reporting poorer business conditions from those reporting improvement. So, readings above zero indicate more positive than negative responses. These indexes have a good correlation with growth in the series covered. The data are available in Haver's SURVEYS database.
| Federal Reserve Bank of Philadelphia: Nonmanufacturing Business Outlook Survey (Diffusion Index, SA) | Feb | Jan | Dec | Feb'17 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| General Activity - Company | 32.1 | 29.3 | 20.6 | 36.4 | 27.3 | 19.7 | 31.3 |
| New Orders | 16.7 | 21.6 | 12.2 | 21.7 | 19.1 | 15.7 | 21.8 |
| Sales or Revenue | 29.3 | 23.9 | 28.7 | 29.2 | 27.9 | 16.2 | 23.8 |
| Inventories | 8.0 | -3.6 | 2.6 | 5.9 | 3.8 | 4.4 | 5.2 |
| Number of Full-Time Permanent Employees | 18.0 | -0.4 | 10.5 | 13.3 | 14.8 | 11.7 | 15.6 |
| Prices Paid | 23.7 | 27.8 | 27.1 | 15.9 | 21.4 | 17.5 | 19.3 |
| Wage & Benefit Costs | 34.1 | 29.9 | 33.9 | 28.4 | 33.4 | 31.2 | 32.5 |
| Expected General Activity - Company | 58.5 | 62.6 | 45.1 | 56.3 | 49.9 | 43.0 | 53.8 |
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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