Philadelphia Fed Factory Index Remains Negative in January
by:Tom Moeller
|in:Economy in Brief
Summary
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Index is negative for seven of last eight months.
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New & unfilled orders remain depressed. Employment improves.
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Prices paid index reaches new low.
The Federal Reserve Bank of Philadelphia reported that its Composite Index of Business Conditions rose to -8.9 during January from -13.7 in December. The index remained below its peak of 45.6 in April of 2021. A reading of -11.0 had been expected in the Action Economics Forecast Survey.
The ISM-Adjusted Composite Index improved to 49.2 this month from 46.1 in December. It was the highest level in three months, but still indicated a contraction in overall activity.
Movement amongst the component series varied. The new orders series rose to -10.9, its least negative reading in five months. An increased 28.3% of respondents reported orders improvement while a steady 39.3% reported orders deterioration. The shipments index rose to 11.1 this month from -0.9 in December. An increased 29.9% of respondents reported shipments improvement while a lessened 18.8% reported a decline. The delivery times reading rose to -5.6 from -7.2. The unfilled orders index fell to -19.2 from -14.1, negative for the eighth straight month. The inventories index rose to 0.9, the first positive reading in five months.
On the labor front, the employment index rose to 10.9 from -0.9. It remained well below its April 2022 peak of 38.4 as an increased 21.6% of respondents reported more hiring and a lessened 10.7% reported less. The hours-worked index improved to 4.0 but remained below its high of 35.3 in March of 2021.
The prices paid index fell sharply to 24.5 from 36.3 in December. It has fallen from a high of 83.6 in November 2021. A slightly higher 39.9% of respondents reported higher prices while a greatly increased 15.4% reported price declines. The prices received index rose to 29.9 from 28.1 in December.
The future activity index increased to 4.9 this month, its first positive reading since May of 2022. Component changes were mixed. The expected prices paid index declined to a recovery low.
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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