Tag: Philadelphia Fed

Monday Economic Report – June 22, 2015

Here is the summary for this week’s Monday Economic Report: 

Last week, one media outlet reported that manufacturing has been in a “technical recession” for the past six months. I am more hesitant to use the R-word to describe the sector’s performance year-to-date, and in my view, this description somewhat overstates the significance of broader market trends, particularly for expectations moving forward. At the same time, manufacturing production has declined since late last year, as illustrated in the graphic below. A number of significant economic headwinds have reduced output in four of the past six months, reducing the year-over-year pace of growth in the sector from 4.5 percent in November to 1.8 percent in May. Capacity utilization has also declined for five consecutive months, down from 78.1 percent in December to 77.0 percent in May. (continue reading…)

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Philly Fed: Manufacturing Activity Rose to Its Highest Level of 2015 So Far

The Federal Reserve Bank of Philadelphia said that new orders and shipments rebounded in June, lifting its headline manufacturing index to its highest level of 2015 so far. The composite index of general business activity rose from 6.7 in May to 15.2 in June, with the indices for orders (up from 4.0 to 15.2) and shipments (up from 1.0 to 14.3) each up strongly. The key to each of these measures was a drop in the percent saying that activity was declining. For instance, the percentage of respondents suggesting that shipments had declined in the month fell from 28.5 percent in May to 16.0 percent in June. This indicates that manufacturing activity has stabilized from weaknesses earlier in the year, providing some encouragement moving forward. (continue reading…)

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Monday Economic Report – May 26, 2015

Here is the summary for this week’s Monday Economic Report:

The minutes of the April 28–29 Federal Open Market Committee (FOMC) meeting highlighted the nuance that many of us see in the economy right now. The Federal Reserve highlighted a number of challenges facing consumers and businesses in the early months of 2015, noting how these headwinds have dampened overall activity year-to-date. On the other hand, the FOMC felt that slowing economic growth was largely due to “transitory factors,” with its outlook mostly unchanged for the rest of this year. The Federal Reserve projects growth of 2.3 to 2.7 percent in 2015, and it expects the unemployment rate to fall to 5.0 to 5.2 percent.   (continue reading…)

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Philly Fed: Manufacturing Outlook Eased Slightly in May

The Philadelphia Federal Reserve Bank said that the manufacturing outlook eased slightly in May. The composite index of general business activity dropped from 7.5 in April to 6.7 in May. In general, the outlook has weakened so far this year relative to last year, with the headline measure averaging 6.1 through the first five months of 2015. This compares to the more-robust average of 25.1 observed in the second half of 2014, with the softness experienced year-to-date largely the result of a number of headwinds seen in the U.S. and global economy. At the same time, manufacturers in the Philly Fed district have reported expanding levels of activity for 15 straight months. (continue reading…)

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Monday Economic Report – April 20, 2015

Here is the summary for this week’s Monday Economic Report:

Manufacturing production increased 0.1 percent in March. This followed three months of weaker data, including declines in both January and February. There have been some significant headwinds hitting the manufacturing sector over the past few months, including a strong U.S. dollar, weakened economic markets abroad, lower crude oil prices, the West Coast ports slowdown and weather. These challenges have slowed activity in the sector since November. The latest Beige Book discussed these headwinds. The year-over-year pace of manufacturing production in March was 2.4 percent, down from 4.5 percent in November. Meanwhile, total industrial production, which includes mining and utilities, fell 0.6 percent in March, declining for the third time in the past four months. As such, the data suggest manufacturers have started the new year on a very soft note despite optimism for better demand and output moving forward. (continue reading…)

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Philly Fed: Modest Manufacturing Growth in April, but With Lingering Challenges

The Federal Reserve Bank of Philadelphia said that manufacturing activity picked up a bit in April after softening over the past three months. The composite index of general business activity rose from 5.0 in March to 7.5 in April. This suggests modest growth overall, even as it continues to show an expansion that was slower than at the end of last year. The headline index was 24.3 in December, for instance. The Manufacturing Business Outlook Survey continues to reflect mostly positive attitudes moving forward, despite headwinds that will continue to challenge growth. One of those headwinds has been a stronger U.S. dollar. (continue reading…)

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Monday Economic Report – March 23, 2015

Here is the summary for this week’s Monday Economic Report: 

The U.S. economy has sputtered a bit in the early months of 2015. While it continues to grow modestly, several economic indicators are weaker than we would prefer. For example, manufacturing production decreased by 0.2 percent in February, declining for the third straight month. Many headwinds have combined to bring about this softness in the manufacturing sector, including global economic weakness, a strong U.S. dollar, the West Coast ports slowdown, a cautious consumer and the weather in some parts of the country. (continue reading…)

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Philly Fed: Modest Manufacturing Growth in the District in March

The Federal Reserve Bank of Philadelphia reported that manufacturing activity has expanding modestly in March. The composite index of general business activity edged marginally lower, down from 5.2 in February to 5.0 in March. Overall activity has been softer-than-desired in the first three months of 2015, averaging just 5.5; whereas, the composite index had averaged a more robust 18.6 for 2014 as a whole. Nonetheless, the Manufacturing Business Outlook Survey has now expanded for 13 straight months, and business leaders in the district remain relatively optimistic about the coming months. (continue reading…)

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Monday Economic Report – February 23, 2015

Here is the summary for this week’s Monday Economic Report: 

In the minutes of its January 27–28 meeting, the Federal Open Market Committee (FOMC) provided a nuanced view of the economic outlook. Participants noted that “economic activity had been expanding at a solid pace,” and they were mostly optimistic about the “prospects for further improvement in 2015.” Yet, the FOMC also pointed to some significant headwinds in the U.S. economy, including sluggish global growth, a stronger U.S. dollar, federal government sequestration and reduced crude oil prices. Regarding the latter, the Federal Reserve said that it was concerned that “persistently low energy prices might prompt a larger retrenchment of employment [and capital investment] in these industries.” (continue reading…)

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Monday Economic Report – January 20, 2015

Here is the summary for this week’s Monday Economic Report: 

Financial markets around the world continued to react to the softening global economic environment. In particular, foreign exchange markets were rocked by news that Switzerland would no longer support its cap on the franc, where that currency has been seen as a safe haven, particularly against the euro. Almost immediately, the Swiss franc appreciated sharply against the euro and other currencies. For its part, the euro has continued to depreciate against the U.S. dollar, with one euro selling for $1.1581 on Friday. This was down $1.3927 on March 17, the high point of 2014, representing an appreciation of more than 17 percent for the U.S. dollar against the euro. These developments could hurt the ability of manufacturers in the United States to grow exports. (continue reading…)

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