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Economy in Brief

Philadelphia Fed Nonmanufacturing Business Index Slips Slightly in November, but Details Brighter
by Sandy Batten  November 22, 2015

The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions slipped a bit in November to 15.6 from 16.3 in October. This was the fourth consecutive monthly decline and the lowest level since July 2015. Still, 41% of respondents reported an increase in current activity, up from 40% in October. There is not a market consensus forecast for this release. The expectations index for November was unchanged at 40.4, though 54% of respondents look for stronger activity six months from now. This index has generally fluctuated within a range during 2016.

The components of the release, however, demonstrated more optimism that did the headline current conditions index. The new orders index jumped to 12.6 in November from 5.7 in October with 34% reporting an increase. Sales/revenues exhibited even more ebullience, surging to 17.2 in November from 6.0 in October with 39% of respondents indicating an increase in sales/revenues in November. And the number of full-time permanent employees index rose to 14.3 from 8.5 in October with 27% reporting an increase. Prices paid edged up to 16.5 from 15.0 in October.

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) Nov Oct Sep Nov'15 2015 2014 2013
General Activity - Company 15.6 16.3 16.7 28.3 31.4 38.8 29.8
  New Orders 12.6 5.7 10.6 17.2 21.7 27.9 20.2
  Sales or Revenue 17.2 6.0 11.1 24.0 23.6 30.2 27.0
  Inventories 5.6 7.6 -1.1 2.9 5.2 5.8 3.0
  Number of Full-Time Permanent Employees 14.3 8.5 19.3 15.7 15.6 17.3 18.8
  Prices Paid 16.5 15.0 29.9 19.1 19.3 19.7 20.6
Expected General Activity - Company 40.4 40.4 52.7 56.6 54.0 60.1 47.4
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