Global| May 23 2017Philadelphia Fed Nonmanufacturing Business Conditions Weaken
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions in May fell to 25.8 from 34.9 during April. The index remained up versus one year ago. Forty-four percent of respondents reported an [...]
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions in May fell to 25.8 from 34.9 during April. The index remained up versus one year ago. Forty-four percent of respondents reported an increase in current activity, while nineteen reported less. The expectations index at the company level for May declined to 49.9, a six-month low.
The new orders index fell as well. The sales/revenues index also was down m/m but up y/y. The inventories index dropped into negative territory for the first time since last fall following accumulation early this year. On the employment front, the index of full-time permanent employees fell to the weakest reading since September and reversed last month's strength. The index for part-time or temporary employment eased m/m but remained strong y/y. Wage & benefit cost gains declined moderately following last month's strength. The average employee workweek index held roughly steady. The capital expenditures reading on physical plant as well as equipment & software eased modestly.
The index for prices paid fell sharply to the lowest point in three months and was down y/y. The index of prices received eased moderately following a sharp April increase.
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) | May | Apr | Mar | May'16 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| General Activity - Company | 25.8 | 34.9 | 32.5 | 19.3 | 19.7 | 31.3 | 38.7 |
| New Orders | 15.0 | 33.5 | 22.6 | 21.1 | 15.6 | 21.7 | 27.9 |
| Sales or Revenue | 25.5 | 34.7 | 20.3 | 22.2 | 16.1 | 23.6 | 30.2 |
| Inventories | -1.9 | 7.1 | 4.6 | 7.8 | 4.4 | 5.2 | 5.8 |
| Number of Full-Time Permanent Employees | 9.3 | 26.4 | 17.2 | 11.6 | 11.7 | 15.5 | 17.3 |
| Prices Paid | 16.6 | 31.6 | 18.0 | 20.9 | 17.5 | 19.2 | 19.7 |
| Expected General Activity - Company | 49.9 | 59.1 | 53.8 | 42.3 | 42.9 | 53.8 | 59.9 |
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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