The November Philadelphia Federal Reserve Bank's Index of General Business Conditions in the manufacturing sector recovered just a piece of its October decline. The rise to 8.2 followed a sharp October decline to 6.8 from 10.9 in September.

The index is a diffusion index for each component or series. It reflects the increase in activity reported less the decrease.

During the last ten years there has been a 59% correlation between the level of the Philadelphia Fed Business Conditions Index and the three-month growth in factory sector industrial production. There has been a 42% correlation with q/q growth in real GDP.

The new orders index improved very slightly as a meaningful gain in new orders was offset by a sharp rise in orders which had decreased. The employment index fell sharply as the number of firms reporting an increase fell sharply and the number of firms showing a decrease rose. During the last ten years there has been a 75% correlation between the employment index and the three-month growth in factory payrolls.

The business conditions index reflects a separate survey question, not the sub indexes.

The prices paid index slipped as the number of firms reporting an increase fell and the number reporting a decrease rose. During the last ten years there has been a 76% correlation between the prices paid index and the three-month growth in the intermediate goods PPI. There has been an 85% correlation with the change in core intermediate goods prices.

The separate index of expected business conditions in six months fell sharply to its lowest level since December of last year. Expectations for new orders plummeted as did expectations for the number of employees.

The latest Survey of Professional Forecasters from the Federal Reserve Bank of Philadelphia is available here.