by Bill McBride on 3/20/2008 10:02:00 AM
Thursday, March 20, 2008
My apology, I Initially used data for the wrong month.
The Philadelphia Fed Index was released today: Business Outlook Survey.
Click on graph for larger image.
This graph shows the Philly index vs. recessions for the last 40 years. There are a number of times the index was below zero without a recession - so the reading today doesn't mean the economy is in recession. However it is very likely that the economy is already in recession.
From the release, weaker conditions and higher prices:
Indexes Suggest Continued Weakness
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, improved from -24.0 in February to -17.4 in March (see Chart). The index has remained negative for four consecutive months.
Firms Report Higher Prices
A notable share of the firms reported higher prices for inputs this month. Sixty-one percent of the manufacturers surveyed reported higher input prices. The prices paid index jumped from 46.6 in February to 54.4 and has increased 18 points since December.
Six-Month Outlook Improves But Remains Cautious
The future general activity index rebounded from a reading of -16.9 in February (its lowest since 1990) to -0.5 this month (see Chart). The percentage of firms expecting growth in activity over the next six months (28 percent) was offset by the percentage expecting decreases (29 percent).