Thursday, June 17, 2010

Philly Fed Business Index Dramatically Slows, Lowest Reading in 10 Months

Inquiring minds are reading the Philadelphia Fed June Business Outlook Survey for clues on the economy. http://www.philadelphiafed.org/research ... os0610.pdf

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased notably from a reading of 21.4 in May to 8.0 in June. The index, which had edged higher for four consecutive months, fell back to its lowest reading in 10 months.



Until this month, firms’ responses had been suggesting that labor market conditions were improving, but indexes for current employment and work hours were both slightly negative. For the first time in seven months, more firms reported a decrease in employment (18 percent) than reported an increase (17 percent). The largest percentage (62 percent), however, reported steady employment levels. The workweek index also declined into negative territory, its first negative reading in eight months.

Firms Report Reduced Cost Pressures

Nineteen percent of firms reported higher input prices this month, down significantly from 39 percent last month. The prices paid index decreased 26 points but remains positive, now at 10.0. On balance, firms reported declines in their own manufactured goods — slightly more firms reported decreases in their prices (15 percent) than reported increases (9 percent). The largest percentage, 71 percent, reported no change in the prices of their manufactured goods. The prices received index fell 10 points, to â€