Thursday, December 19, 2019

Philly Fed Manufacturing Suggests Activity "Flat" in December

by Calculated Risk on 12/19/2019 08:42:00 AM

From the Philly Fed: Current Manufacturing Indexes Suggest Flat Growth in December

Manufacturing activity in the region was flat this month, according to results from the December Manufacturing Business Outlook Survey. The survey's broad indicator for current activity dropped to a reading near zero this month, although indicators for new orders, shipments, and employment remained at higher positive readings. The survey’s future activity indexes remained positive, suggesting continued optimism about growth for the next six months.

The diffusion index for current general activity fell 10 points this month to 0.3, its lowest reading in six months … Manufacturers continued to report expanding employment this month, although the current employment index decreased 4 points to 17.8.
emphasis added
This was slightly above the consensus forecast. 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 December), and five Fed surveys are averaged (blue, through November) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through November (right axis).

These early reports suggest the ISM manufacturing index will probably be weak again in December.