Thursday, June 20, 2019

Philly Fed Mfg "Manufacturing conditions in the region weakened" in June

by Calculated Risk on 6/20/2019 08:41:00 AM

From the Philly Fed: June 2019 Manufacturing Business Outlook Survey

Manufacturing conditions in the region weakened this month, according to firms responding to the June Manufacturing Business Outlook Survey. The current activity index declined to a reading just above zero this month. The survey’s indexes for new orders, shipments, and employment remained positive but also declined from their May readings. Most of the survey’s future activity indexes improved but continue to reflect muted optimism for the remainder of the year.

The diffusion index for current general activity decreased from 16.6 in May to 0.3 this month. This is the lowest reading since February, when the index fell below zero for one month.
...
On balance, the firms continued to report increases in employment. Nearly 25 percent of the responding firms reported increases in employment, while 9 percent reported decreases this month. The employment diffusion index, however, decreased 3 points to 15.4. The average workweek index fell 4 points this month, to 7.3.
emphasis added
Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Fed Manufacturing Surveys and ISM PMI Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (yellow, through June), and five Fed surveys are averaged (blue, through May) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through May (right axis).

These early reports suggest the ISM manufacturing index will be weak in June.