Global| Dec 20 2016Philadelphia Fed Nonmanufacturing Business Index Improves Broadly
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions in December rose to 30.4 from 15.6 in November. It rebounded to the highest level since June 2015. Forty-seven percent of respondents [...]
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions in December rose to 30.4 from 15.6 in November. It rebounded to the highest level since June 2015. Forty-seven percent of respondents reported an increase in current activity, a thirteen-month high. Despite the monthly rebound, the figure for all of last year fell sharply from 2015. The expectations index for December surged to 65.8, the highest level since August of last year. Expectations for regional activity also were greatly improved.
Virtually all of the index components improved. The new orders index jumped to the highest level since July with 41% of respondents reporting an increase. Sales/revenues similarly improved. On the employment front, the index of full-time permanent employees rose to the highest point since October or last year, while the index for part-time or temporary employment also strengthened. The average employee workweek rebounded to nearly the highest level since April, but wage & benefit costs rose just modestly. These costs have been trending sideways since 2011. Capital expenditures on physical plant strengthened along with the equipment & software reading. The index for prices paid increased m/m, but remained sharply below the Q2 and Q3 highs. The index of prices received fell sharply m/m.
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) | Dec | Nov | Oct | Dec'15 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| General Activity - Company | 30.4 | 15.6 | 16.3 | 24.8 | 19.7 | 31.4 | 38.8 |
| New Orders | 21.6 | 12.6 | 5.7 | 17.2 | 15.6 | 21.7 | 27.9 |
| Sales or Revenue | 23.5 | 17.2 | 6.0 | 24.0 | 16.1 | 23.6 | 30.2 |
| Inventories | 11.9 | 5.6 | 7.6 | 2.9 | 4.3 | 5.2 | 5.8 |
| Number of Full-Time Permanent Employees | 19.7 | 14.3 | 8.5 | 15.7 | 11.7 | 15.6 | 17.3 |
| Prices Paid | 16.9 | 16.5 | 15.0 | 19.7 | 17.5 | 19.3 | 19.7 |
| Expected General Activity - Company | 65.8 | 40.4 | 40.4 | 56.6 | 43.1 | 54.0 | 60.1 |
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
