Thursday, June 16, 2011

Philly Fed Survey: "Regional manufacturing activity weakened in June"

by Calculated Risk on 6/16/2011 10:00:00 AM

From the Philly Fed: June 2011 Business Outlook Survey

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from 3.9 in May to -7.7, its first negative reading since last September. [any reading below zero is contraction]. The demand for manufactured goods, as measured by the current new orders index, showed a similar decline: The index fell 13 points and recorded its first negative reading since last October. The current shipments index fell just 3 points but remained slightly positive. Firms reported declines in inventories and unfilled orders, and shorter delivery times.

Firms’ responses suggested little overall improvement in the labor market this month. The current employment index remained positive for the ninth consecutive month ...
This indicates contraction in June for the first time since last September. This was well below the consensus of 7.0.

ISM PMI Click on graph for larger image in graph gallery.

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

This early reading suggests the ISM index could be below 50 in June - is so, this would be the lowest reading since mid-2009.

Earlier:
Housing Starts increase in May
Weekly Initial Unemployment Claims decrease to 414,000