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 6/19/08 For Jun 2008 | ||||||||||||
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Highlights
News is very bad from the Mid-Atlantic manufacturing region where contraction is apparently settling in while price pressures increase. The Philadelphia Federal Reserve's business activity index fell another point-and-a-half into negative territory, to -17.1 for the June report. Bad news is everywhere: new orders -12.4 vs. -3.7 May, shipments -6.7 vs. 2.2, employment -6.9 vs. -1.0.
Prices paid jumped more than 15 points to 69.3, while prices received remains unusually high at 29.7 though a bit less severe than May's 31.6. The only positive in the report continues to be the six-month outlook which came in at 21.3, down nearly 7 points but still indicating that a major share of the sample is optimistic on the future.
Treasury yields slipped in reaction to the report which points squarely at recession with inflation for the manufacturing sector. But the ISM report on the manufacturing sector, which is on a national scale and is more closely watched, has held steady so far this year, perhaps with a tilt to the downside. This report, along with equally weak results earlier this week from the Empire State report, may raise expectations that the ISM manufacturing report, to be released at the beginning of July, will shift measurably lower.
The general business conditions component of the Philadelphia Fed's business outlook survey index has been pointing to contraction for manufacturing in the mid-Atlantic region. The business activity index has been in negative territory for six consecutive months with the May reading coming in at minus 15.6. But the decline in activity may be slowing as new orders in May showed less severe contraction minus 3.7 in May. Rising input costs are still a problem as the prices paid index rose more than 2 points in May to 53.8. Output prices have been showing less pressure, posting a 7 tenths gain to 31.6.
Philadelphia Fed survey Consensus Forecast for June 08: -10.0
Range: -20.0 to -2.2
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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. |
| 2008 Release Schedule | ||||||||||||||||||||||||||
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