Global| Jan 24 2017Philadelphia Fed Nonmanufacturing Business Index Continues to Strengthen
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions in January rose to 33.3 from 26.1 during December, revised from 30.4. It was the highest level since October 2015. Forty-nine percent of [...]
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions in January rose to 33.3 from 26.1 during December, revised from 30.4. It was the highest level since October 2015. Forty-nine percent of respondents reported an increase in current activity, also the most in 15 months. The expectations index for January improved to 68.3, while expectations for regional activity also improved sharply.
Virtually all all of the index components improved. The new orders index jumped to the highest level since February2015 with 40% of respondents reporting an increase. Sales/revenues similarly improved to the highest level since February 2015. On the employment front, the index of full-time permanent employees improved to the highest point since October of 2015, but the index for part-time or temporary employment weakened. The average employee workweek jumped to the highest point since January 2014. Capital expenditures on physical plant strengthened to a record high while the equipment & software reading also surged.
The index for prices paid neared a two-year high. The index of prices received also jumped, and wage & benefit costs similarly surged.
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'16 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| General Activity - Company | 33.3 | 26.1 | 16.8 | 18.5 | 19.7 | 31.3 | 38.7 |
| New Orders | 28.9 | 20.2 | 13.6 | 16.0 | 15.6 | 21.7 | 27.9 |
| Sales or Revenue | 43.5 | 20.4 | 16.3 | 16.0 | 16.1 | 23.6 | 30.2 |
| Inventories | 10.4 | 11.2 | 6.2 | 2.6 | 4.4 | 5.2 | 5.8 |
| Number of Full-Time Permanent Employees | 19.5 | 16.7 | 12.2 | 12.2 | 11.7 | 15.5 | 17.3 |
| Prices Paid | 29.5 | 18.1 | 16.3 | 17.5 | 17.5 | 19.2 | 19.7 |
| Expected General Activity - Company | 68.3 | 61.6 | 39.5 | 26.9 | 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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