Thursday, April 21, 2016

Earlier: Philly Fed Manufacturing Survey showed Slight Contraction in April

by Bill McBride on 4/21/2016 11:05:00 AM

Earlier from the Philly Fed: April 2016 Manufacturing Business Outlook Survey

Firms responding to the Manufacturing Business Outlook Survey reported no improvement in business conditions this month. The indicator for general activity, which rose sharply in March, fell to a slightly negative reading in April. Other broad indicators suggested a similar relapse in growth that was reported last month. The indicators for both employment and work hours also fell notably. Despite weakness in current conditions, the survey’s indicators of future activity showed continued improvement, suggesting that the fallback is considered temporary.
The diffusion index for current activity decreased from 12.4 in March to -1.6 this month. The index had turned positive last month following six consecutive negative readings ...

The survey’s indicators of employment corroborate weakness in the other broad indicators this month. The employment index decreased 17 points and registered its fourth consecutive negative reading.
emphasis added
This was below the consensus forecast of a reading of 9.0 for April.

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 April. The ISM and total Fed surveys are through March.

The average of the Empire State and Philly Fed surveys remained positive in April (yellow).  This suggests the ISM survey will probably be above 50 again this month.