Thursday, January 21, 2016

Philly Fed Manufacturing Survey showed "modest" contraction in January

by Bill McBride on 1/21/2016 09:01:00 AM

From the Philly Fed: January 2016 Manufacturing Business Outlook Survey

Manufacturing conditions in the region contracted modestly this month, according to firms responding to the January Manufacturing Business Outlook Survey. The indicator for general activity remained negative this month; however, it rebounded from a lower reading in December.
The diffusion index for current activity increased from a revised reading of -10.2 in December to -3.5 and has now been negative for five consecutive months ...

The survey’s labor market indicators suggest weaker employment. The employment index decreased 4 points, from 2.2 to -1.9.
emphasis added
This was close to the consensus forecast of a reading of -4.0 for January.

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 January. The ISM and total Fed surveys are through December.

The average of the Empire State and Philly Fed surveys decreased in January, and was solidly negative.  This suggests another weak reading for the ISM survey.