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Economy in Brief

Philadelphia Fed Survey of Nonmanufacturing Business Activity Index Is Little Changed
by Tom Moeller  April 26, 2016

The Federal Reserve Bank of Philadelphia reported that its Index of Nonmanufacturing Sector Activity at the company level was roughly unchanged at 17.8 in April versus 17.5 in March. The measure has been declining, however, since early last year. Working the other way, the expectations index for general activity improved sharply m/m. These diffusion indexes are seasonally adjusted.

Improvement in the labor market components paced this month's overall improvement. The full-time and part-time employment figures notched higher following a sharp decline in March. The average workweek reading rebounded to the highest level since November 2014, and the wage & benefit costs reading surged to an 18-month high.

The new orders and sales indexes continued their recent downtrends, and the inventory series eased. Capital spending plans weakened as well.

The prices paid diffusion index rebounded somewhat after collapsing in March, but prices received fell to the lowest reading since September.

Expectations for general business activity improved sharply and reversed a recent downtrend.

The Philadelphia Fed figures are diffusion indexes which are calculated by subtracting the percent of respondents reporting poorer business conditions from those reporting improvement. Thus, they have a good correlation with growth in the series covered. The data is available in Haver's SURVEYS database.

Federal Reserve Bank of Philadelphia: Nonmanufacturing Business Outlook Survey (Diffusion Index, SA) Apr Mar Feb Apr'15 2015 2014 2013
General Activity - Company 17.8 17.5 25.6 34.9 31.4 38.8 29.8
  New Orders 13.9 17.0 14.6 26.8 21.7 27.9 20.2
  Sales or Revenue 9.6 19.0 9.1 27.9 23.6 30.2 27.0
  Inventories 6.5 8.3 -0.5 10.9 5.2 5.8 3.0
  Number of Full-Time Permanent Employees 7.5 6.1 11.1 17.0 15.6 17.3 18.8
  Prices Paid 10.9 3.2 18.9 15.2 19.3 19.7 20.6
Expected General Activity - Company 56.0 42.2 30.5 45.2 54.0 60.1 47.4
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