It's Always Sunny in Philadelphia

Solid news out of Flip-Flip-Flipadelpia.

Forex Pros details:

Manufacturing activity in Philadelphia increased significantly more-than-expected in November, rising to the highest level since February, official data showed on Thursday.

In a report, the Federal Reserve Bank of Philadelphia said that its manufacturing index rose to 22.0 in November, after rising to 1.0 in October.

Analysts had expected the index to rise to 4.5 in November.

The report said that all of the survey's broad indicators of economic performance showed improvement from their reading in October, and firms reported an increase in employment and work hours.

Survey Results

Survey Results of 6 Month Forecast



Source: Philly Fed

Philthy Fed Index

Bloomberg details:

Manufacturing in the Philadelphia region unexpectedly shrank in August for the first time in a year as orders and sales slumped, a sign factories are being hurt by the U.S. economic slowdown.

The Federal Reserve Bank of Philadelphia’s general economic index fell to minus 7.7 this month, the lowest reading since July 2009, from 5.1 in July. Readings less than zero signal contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware.

Manufacturing is slowing after leading the economy out of the worst recession in seven decades as consumers rein in spending. With factory growth waning and companies slow to add employees, the economic expansion will slow in the second half of the year.

“It’s not a pretty picture,” said Raymond Stone, chief economist at Stone & McCarthy Research Associates in Skillman, New Jersey, who forecast a reading of minus 6. “We’ll see continued gains in manufacturing output, but it might be very small.”

Source: Philly Fed

Philly Fed's Weak Economic Report

Bloomberg details:

The Federal Reserve Bank of Philadelphia’s general economic index slumped to 8 in June from 21.4 the previous month. Readings above zero signal growth.

Economists forecast the index would fall to 20, according to the median of 58 projections in a Bloomberg News survey. Estimates ranged from 10 to 24.

The figures follow a report from the Labor Department today that showed consumer prices fell in May for a second month. The Labor Department also said jobless claims rose by 12,000 to 472,000 last week.

That employment report is concerning, especially when taken in combination with the Philly Fed report's shift of employment (number of employees / average workweek) to negative territory.



Source: Philadelphia Fed

Philly Fed Shows Strength, But Less

Unlike the strength shown in the Empire Manufacturing Survey, the Philadelphia Fed Survey showed the recovery may not be one direction in nature. Bloomberg details:

Manufacturing in the Philadelphia region expanded at a slower pace this month, a reminder that the recovery from the deepest recession since the 1930s will be gradual.

The Federal Reserve Bank of Philadelphia’s general economic index dropped to 11.5, lower than forecast, from a September reading of 14.1 that was the highest since June 2007, figures from the bank showed today.

Factories have been slow to rev up output as excess capacity, mounting joblessness and the wind-down of stimulus measures such as “cash-for-clunkers” point to an uneven rebound in demand. Even so, inventories near record-low levels set the stage for an eventual pickup in production when consumer spending strengthens.

Manufacturers were less upbeat about the future, today’s report showed. Expectations for the next six months fell to 39.8 from 47.8. Factory activity nationwide accounts for about 12 percent of the U.S. economy, the world’s largest.

Source: Philly Fed

Philly Fed Index Disappoints

Briefing.com with the details:

The Philadelphia Fed Index didn't live up to expectations. A reading of -7.5 was worse than the consensus estimate of -4.8 and down from the June reading of -2.2. The dividing line for this report between expansion and contraction is zero.

Strikingly, the six-month outlook for general business activity dipped to 51.9 from 60.1 in June. The July reading is still comfortably above the 37.7 six-month average, yet the pullback speaks to the increasing reservations about the pace of recovery in the face of a continued rise in unemployment.

Looking at the changes from June through July, we see longer work weeks (due to less employees), higher prices paid / lower prices received, and an increase in new orders (but less filled and shipped).



Source: Philly Fed

Philly Fed Index... "Business Sucks Now, BUT WILL Improve" Edition

Felix Salmon (now at Reuters) with the details:

The Philadelphia Fed said its business activity index came in at minus 24.4 in April compared with minus 35.0 in March. A reading below zero indicates contraction in the region's manufacturing sector.

The median forecast among economists polled by Reuters was minus 32.0.

Among the survey's relative bright spots, the new orders index came in at minus 24.3 compared with minus 40.7 in March, while the employee gauge stood at minus 44.9 against March's minus 52.0.

The outlook among Mid-Atlantic companies also improved in April. The Philadelphia Fed's six-month conditions index bounced up to 36.2 from 14.5 in March. The April outlook figure was the highest since October 2007 prior to the start of the current recession.

Source: Philadelphia Fed

Philly Fed Index... "It Can't Get Worse" Edition

Interest Rate Roundup reported:

The Philadelphia Fed index plunged to -41.3 in February from -24.3 in January. That was far worse than the average forecast for a reading of -25 and the lowest reading since October 1990 (-48.2). Subindices tracking new orders, employment, and shipments all fell sharply.

Though in a bit of a silver lining, the index measuring expectations about the next six months rose to 15.9 from 7.4 a month earlier. That's the highest level since September.

Source: Philadelphia Fed