Thursday, July 21, 2016

Earlier: Philly Fed Manufacturing Survey showed Contraction in July

by Bill McBride on 7/21/2016 12:57:00 PM

From the Philly Fed: July 2016 Manufacturing Business Outlook Survey

Manufacturing activity in the region fell slightly in July, according to firms responding to this month’s Manufacturing Business Outlook Survey. Although the indicator for current general activity turned negative, indicators for new orders and shipments were positive. Employment was flat at the reporting firms this month.
...
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, fell from 4.7 in June to -2.9 this month. For nine of the past 11 months, this diffusion index has been negative ...
...
The survey’s broad indicator of future growth moved slightly higher this month: The diffusion index for future general activity increased 4 points to 33.7, which is close to its average of 35.9 during the past five years
emphasis added
This was below the consensus forecast of a reading of 5.0 for July.

ISM PMI Click on graph for larger image.

Here is a graph comparing the regional Fed surveys and the ISM manufacturing index. The yellow line is an average of the NY Fed (Empire State) and Philly Fed surveys through July. The ISM and total Fed surveys are through June.

The average of the Empire State and Philly Fed surveys was slightly negative in July (yellow).  This suggests the ISM survey will probably indicate slower expansion this month.