Global| Oct 24 2017Philadelphia Fed Nonmanufacturing Business Conditions Soften
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions at the company level in October slipped to 24.7 from 25.7 during September. The index remained down versus the February high of 38.0. [...]
The Federal Reserve Bank of Philadelphia's Nonmanufacturing Business Index of current conditions at the company level in October slipped to 24.7 from 25.7 during September. The index remained down versus the February high of 38.0. Forty-two percent of respondents reported an increase in current activity while 17% reported less. The expectations index at the company level for October declined to 38.0, down from 68.3 in January. It was at the lowest level sine February of last year.
The new orders index declined m/m, and was well low its April level. Sales or revenue eased, but remained below January. Unfilled orders similarly fell, but inventories exhibited modest improvement. The number of full-time permanent employees increased sharply m/m and returned to the level averaged earlier in the year. The index of part-time/temporary employment improved moderately. The average workweek reading declined sharply to the lowest level in twelve months. Capital expenditures on facilities improved, while spending on equipment and software surged.
The index of prices paid strengthened to the highest level in six months following extreme volatility earlier this year. Twenty-eight percent of respondents paid higher prices while close to none paid less. The prices received index strengthened while the wages and benefits index also improved.
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) | Oct | Sept | Aug | Oct'16 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| General Activity - Company | 24.7 | 25.7 | 30.7 | 17.4 | 19.7 | 31.3 | 38.7 |
| New Orders | 11.4 | 26.7 | 19.4 | 8.2 | 15.6 | 21.7 | 27.9 |
| Sales or Revenue | 25.5 | 29.3 | 24.5 | 9.1 | 16.1 | 23.6 | 30.2 |
| Inventories | 0.6 | -3.4 | 3.3 | 6.7 | 4.4 | 5.2 | 5.8 |
| Number of Full-Time Permanent Employees | 17.3 | 3.8 | 3.1 | 9.3 | 11.7 | 15.5 | 17.3 |
| Prices Paid | 28.3 | 14.9 | 22.7 | 15.3 | 17.5 | 19.2 | 19.7 |
| Wage & Benefit Costs | 40.1 | 34.0 | 35.9 | 39.5 | 31.2 | 32.5 | 33.1 |
| Expected General Activity - Company | 38.0 | 49.3 | 44.9 | 38.7 | 42.9 | 53.8 | 59.9 |
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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