Global| Jan 23 2018Philadelphia Fed Nonmanufacturing Business Conditions Recover
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 29.3 in January from 20.6 during December. It was the highest index level since August. Forty-six [...]
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions at the company level increased to 29.3 in January from 20.6 during December. It was the highest index level since August. Forty-six percent of respondents reported an increase in current activity while 17% reported a decline. The expectations index at the company level for January surged to 62.6, a twelve-month high.
The new orders index jumped to a level not seen since September. The sales or revenue figure, however, declined moderately. Unfilled orders similarly fell. The number of full-time permanent employees declined sharply to the first negative reading since December 2012. The index of part-time/temporary employment increased m/m to the highest level since June. The average workweek reading eased slightly. Capital expenditures on facilities jumped to the highest level in twelve months, while spending on equipment and software also strengthened.
The index of prices paid added to its recent gains and was sharply higher than its June low. Thirty-two percent of respondents paid higher prices while four percent paid less. The prices received index also surged to a twelve-month high, but the wages and benefits index weakened significantly.
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) | Jan | Dec | Nov | Jan'17 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| General Activity - Company | 29.3 | 20.6 | 18.5 | 32.0 | 27.3 | 19.7 | 31.3 |
| New Orders | 21.6 | 12.2 | 16.3 | 25.8 | 19.1 | 15.7 | 21.8 |
| Sales or Revenue | 23.9 | 28.7 | 20.7 | 37.3 | 27.9 | 16.2 | 23.8 |
| Inventories | -3.6 | 2.6 | 3.7 | 8.9 | 3.8 | 4.4 | 5.2 |
| Number of Full-Time Permanent Employees | -0.4 | 10.5 | 19.5 | 17.2 | 14.8 | 11.7 | 15.6 |
| Prices Paid | 27.8 | 27.1 | 23.8 | 26.3 | 21.4 | 17.5 | 19.3 |
| Wage & Benefit Costs | 29.9 | 33.9 | 41.6 | 37.9 | 33.4 | 31.2 | 32.5 |
| Expected General Activity - Company | 62.6 | 45.1 | 43.4 | 66.1 | 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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