The general conditions index from this business outlook survey is a diffusion index of manufacturing conditions within the Philadelphia Federal Reserve district. This survey, widely followed as an indicator of manufacturing sector trends, is correlated with the ISM manufacturing index and the index of industrial production. Why Investors Care
| Released on 8/16/07 For Aug 2007 | ||||||||||||
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Highlights
The Philadelphia Fed's business activity index came in at dead 0.0 in August, indicating no change from July. The index is not a composite of components, a look at which shows mostly strength. New orders showed growth at 7.1, though down from 11.3 in July, while shipments posted a similar month-to-month comparison at 12.4 vs. 20.3. The six-month outlook actually rose to 36.2 from 30.4, an indication manufacturers in the region are confident that orders will continue apace. Current labor readings were robust with employment spectacularly strong at 21.2 vs. 4.1 and the workweek rising to 13.1 vs. 0.0.
Supply chain data showed no pressure. There was little change in delivery times which accelerated slightly to -2.1 from -1.1 (positive readings indicate delays). Inventories fell to -4.8 from 0.8, welcome news given the risk of slowing production. Unfilled orders do point to slowing production, at -2.1 from 3.2. Price readings eased in the month, reflecting lower energy prices with prices paid at 15.4 vs. 28.1 and prices received at 6.8 vs. 8.8.
The report contrasts with the unusual strength of yesterday's Empire State manufacturing report, falling in line with July's manufacturing report from the ISM which showed slowing conditions. Today's results will help build expectations for another month of moderate readings in August's ISM data. Financial markets, gripped with concern over credit-market contagion, showed no reaction to the numbers.
The general business conditions component of the Philadelphia Fed's business outlook survey index slipped back to 9.2 in July from 18.0 in June, indicating expanding conditions but at a slower rate than June. But the six-month outlook jumped to 30.4 from 16.7 in June. With recent volatility in the markets, many may be giving the outlook portions of manufacturing surveys more attention than in the past.
Philadelphia Fed survey Consensus Forecast for August 07: +8.0
Range: -1.6 to +10.3
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The Philadelphia Fed's business outlook survey is a good leading indicator for the index of industrial production. It is reported in the third week of the month and thus has a lead time of nearly three weeks. |
| 2007 Release Schedule | ||||||||||||||||||||||||||
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