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Philadelphia Fed

Philly Fed: Manufacturing Activity Declined Again in April after Rebounding in March

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The Federal Reserve Bank of Philadelphia said that manufacturing activity declined again after rebounding in March. The composite index of general business activity fell from 12.4 in March to -1.6 in April. As such, the headline number has now been negative in seven of the past eight months, suggesting that manufacturers continue to struggle from recent economic weaknesses. In April, that was most evident in the new orders (down from 15.7 to zero) and shipments (down from 22.1 to -10.8) data, with demand stagnating and shipments plunging. Indeed, the percentage of respondents saying that their orders had increased in the month decreased from 36.7 percent in March to 22.9 percent in April, illustrating the shift in this month’s report. Read More

Philly Fed: Manufacturing Activity Rebounded Following Six Straight Months of Contraction

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The Federal Reserve Bank of Philadelphia said that manufacturing activity rebounded in March following six straight months of contraction. The composite index of general business activity rose from -2.8 in February to 12.4 in March. This was an encouraging sign that manufacturers were starting to see some improvements in activity after months of weakness. Along those lines, new orders (up from -5.3 to 15.7) and shipments (up from 2.5 to 22.1) were each up strongly in March. Indeed, 36.7 percent of respondents in this survey reported increased sales in March, up from 28.3 percent in February, and the percentage citing declining orders dropped from 33.6 percent to 21.0 percent. Read More

Philly Fed: Manufacturing Activity Contracted for the Sixth Straight Month

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The Federal Reserve Bank of Philadelphia said that manufacturing activity contracted for the sixth straight month in February, albeit at a slower pace than in January. The composite index of general business activity rose from -3.5 in January to -2.8 in February. On the positive side, shipments (down from 9.6 to 2.5) continued to expand, but eased for the month. Pricing pressures for raw materials (down from -1.1 to -2.2) remained suppressed, largely due to falling energy costs. Other key measures reflected sliding levels of activity, including new orders (down from -1.4 to -5.3), employment (down from -1.9 to -5.0) and the average workweek (down from -2.2 to -12.9). Read More

Philly Fed: Manufacturing Activity Contracted for the Fifth Straight Month in January

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The Federal Reserve Bank of Philadelphia said that manufacturing activity contracted for the fifth straight month in January. The composite index of general business activity rose from -10.2 in December to -3.5 in January, and yet, the headline figure has now been in negative territory since September. (Note that prior data reflect an annual revision for seasonal adjustments.) The underlying data were mixed. The pace of decline for new orders (up from -11.1 to -1.4) slowed in this latest report. In contrast, labor market data worsened for the month, including hiring (down from 2.2 to -1.9) and the average workweek (down from 0.6 to -2.2). On the positive side, shipments (up from -2.1 to 9.6) picked up at a decent rate, expanding after three consecutive months of declines. Read More

Philly Fed: Manufacturing Activity Returned to Negative Territory in December

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The Federal Reserve Bank of Philadelphia said that manufacturing activity returned to negative territory in December, contracting for third time in the past four months. The composite index of general business activity declined from 1.9 in November to -5.9 in December. The decrease in the headline number was led lower by a worsening in new orders (down from -3.7 to -9.5). The percentage of respondents suggesting that sales had increased for the month dropped from 25.8 percent to 22.4 percent, with those noting decreasing orders up from 29.5 percent to 31.9 percent. This suggests that manufacturers in the Philly Fed region remain quite anxious about demand given global challenges and falling commodity prices, mirroring concerns seen nationally. Read More

Philly Fed: Manufacturing Activity Rebounded Slightly in November

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The Federal Reserve Bank of Philadelphia said that manufacturing activity rebounded in November after contracting in the prior two months. The composite index of general business activity improved from -4.5 in October to 1.9 in November. With that said, manufacturers in the district were not fully out of the woods yet, with several key indicators continuing to decrease on net. This included new orders (up from -10.6 to -3.7), shipments (up from -6.1 to -2.5) and the average workweek (down from -7.3 to -16.2). The good news there was that the pace of decline for new orders and shipments eased for the month – a fact trumpeted by the Philly Fed in the press release noting “slight improvement” in November. Hiring (up from -1.7 to 2.6) also picked up a little, even as three-quarters of responses noted no change in employment. Read More

Philly Fed: Manufacturing Activity Remained Weak in October

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The Federal Reserve Bank of Philadelphia said that growth in the manufacturing sector declined once again in October, extending the contraction seen in September. The composite index of general business activity improved slightly from -6.0 in September to -4.5 in October, but the data indicate further weakening of economic conditions overall in the district. Indeed, new orders (down from 9.4 to -10.6), shipments (down from 14.8 to -6.1) and hiring (down from 10.2 to -1.7) each shifted from modest growth to contracting levels of activity for the month. Thirty-six percent of those completing the survey said that new orders declined for them in October, with one-quarter citing increases and one-third noting no changes. Moreover, in a series of special questions, respondents noted that there continued to be a lot of “slack” in capacity, with an average utilization rate of 76.0 percent, down from 77.4 percent at this time last year. Read More

Philly Fed: Manufacturing Activity Expanded Modestly in August

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The Federal Reserve Bank of Philadelphia said that growth in the manufacturing sector in its district expanded modestly in August, picking up slightly from July. The composite index of general business activity increased from 5.7 in July to 8.3 in August. While this suggests some improvement for the month, growth in activity has decelerated since June’s 15.2 reading, which was the highest level so far in 2015. The headline figure rose primarily on strength in shipments (up from 4.4 to 16.7), with 36.0 percent of respondents suggesting that their shipments were higher in August, up from 23.5 percent in July. Similarly, hiring (up from -0.4 to 5.3) accelerated somewhat, with the percentage of those completing the survey saying that employment was increased up from 12.0 percent to 21.1 percent. The average workweek (up from 4.0 to 8.5) was also longer. Read More

Philly Fed: Growth in Manufacturing Activity Slowed Somewhat in July

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The Federal Reserve Bank of Philadelphia said that growth in the manufacturing sector in its district slowed somewhat in July. The composite index of general business activity decreased from 15.2 in June, its highest level so far in 2015, to 6.7 in July. This suggests some deceleration in the expansion rate, leading more respondents to indicate declines in several key underlying data points. For instance, the percentage of manufacturers suggesting that their new orders had decreased in the month rose from 19.7 percent in June to 24.7 percent in July. This corresponded to the percentage of respondents citing increased new orders dropping from 35.0 percent to 31.7 percent. As such, the new orders index dropped from 15.2 to 7.1 – a reading that suggests a modest expansion in demand in June, even as the growth rate eased from a more-robust pace in July. Read More

Monday Economic Report – June 22, 2015

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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. Read More