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 11/15/07 For Nov 2007 | ||||||||||||
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Highlights
Manufacturing activity in the Mid-Atlantic states is showing only mild growth at most according to the Philadelphia Federal Reserve's November report. The report's headline index inched 1.4 points higher to 8.2 with the key index for new orders rising slightly to a very mild 3.5, a reading that indicates those reporting month-to-month improvement barely outnumbered those reporting a decline. The shipment index showed improvement to 4.7 from a -4.7 in the October report.
But other readings are definitely less positive including a nearly 8 point drop in employment to 4.8, a reading that confirms a similar drop in this morning's Empire State report. Delivery times were also similar in the two reports, both showing easing pressures in the supply chain that are consistent with slowing activity. Price readings were mixed, again like the Empire State report. Prices paid showed a little less severe pressure at 37.7 while prices received showed more pressure, up about 6 points to 18.6.
In a last piece of bad news the overall 6-month outlook tumbled to 11.6 from 41.5 -- an unusually severe change that may be indicating a crack in business confidence. The report warned that two thirds of its sample expect production to contract in the current quarter. Financial markets showed no immediate reaction to the results which however raise new questions whether the nation's manufacturing sector will continue climbing. Tomorrow the Federal Reserve will release its industrial production report for October.
The general business conditions component of the Philadelphia Fed's business outlook survey index slipped to 6.8 in October from 10.9 in September, indicating only modest growth. New orders showed a weakening in forward momentum with a drop to a barely positive 2.7 from 15.1 the month before. Unfilled orders and shipments were actually in negative territory. Inflation readings were disconcerting with prices paid way up to 40.3 and with prices received rising to 12.4. The Fed will be watching to see if we get more indications of "stagflation lite" - sluggish output but with stronger inflation.
Philadelphia Fed survey Consensus Forecast for November 07: 6.0
Range: 0.0 to 10.0
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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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