Philadelphia Fed Factory Index Improves Slightly in December
by:Tom Moeller
|in:Economy in Brief
Summary
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Index remains near recent low.
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New orders, shipments & employment deteriorate.
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Price indexes fall.
The Federal Reserve Bank of Philadelphia reported that its Composite Index of Business Conditions edged higher to -13.8 during December from -19.4 in November. The index has been negative for six of the last seven months and remained below its peak of 50.2 in April of 2021. A reading of -10.0 had been expected in the Action Economics Forecast Survey.
Declines in the component series were broad-based. The new orders series fell to -25.8, its lowest level since April 2020. A lessened 17.2% of respondents reported orders improvement while an increased 43.0% reported orders deterioration. The shipments index fell to -6.2 this month from +7.0 in November. It was the first negative reading since May 2020. A greatly lessened 23.5% of respondents reported shipments improvement while an increased 29.7% reported a decline. The unfilled orders index rose -14.7 from -22.9, but was negative for the seventh straight month. The inventories index rose to -2.7 but the delivery times index fell to -11.9.
On the labor front, there was weakness. The employment index fell to -1.8 from +27.1. It stood below its April 2022 peak of 41.4 as 17.1% of respondents reported more hiring but 19.0% reported less. The hours-worked index declined to -8.9 and was down from a high of 36.4 in March of 2021.
The prices paid index fell sharply to 26.4 from 35.3 in November. It has fallen from a high of 84.6 this past April. A greatly lessened 29.2% of respondents reported higher prices while a fewer 2.9% reported price declines. The prices received index fell to 24.3 from 34.6 in November. It was a four-month low.
The future activity index increased to 3.8 this month from -7.1 in November. Expected new orders, shipments & employment each rose. The expected prices paid index rose to a three-month high.
The Philadelphia Fed data can be found in Haver's SURVEYS database. The expectations figures are from the Action Economics Forecast Survey in AS1REPNA.
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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