posted on 17 March 2016
Written by Steven Hansen
The Philly Fed Business Outlook Survey returned to expansion. Key elements improved. Both manufacturing surveys released so far for this month are in expansion,
This is a very noisy index which readers should be reminded is sentiment based. The Philly Fed historically is one of the more negative of all the Fed manufacturing surveys but has been more positive then the others recently.
The index improved from -2.8 to +12.4. Positive numbers indicate market expansion, negative numbers indicate contraction. The market expected (from Bloomberg) -4.0 to 0.9 (consensus -1.4).
z philly fed1.PNG
Econintersect believes the important elements of this survey are new orders and unfilled orders . Both new orders and unfilled orders improved but unfilled orders remain in contraction.
This index has many false recession warnings.
Summary of all Federal Reserve Districts Manufacturing:
Richmond Fed (hyperlink to reports):
Kansas Fed (hyperlink to reports):
Dallas Fed (hyperlink to reports):
Philly Fed (hyperlink to reports):
z philly fed1.PNG
New York Fed (hyperlink to reports):
Federal Reserve Industrial Production - Actual Data (hyperlink to report):
Holding this and other survey's Econintersect follows accountable for their predictions, the following graph compares the hard data from Industrial Products manufacturing subindex (dark blue bar) and US Census manufacturing shipments (lighter blue bar) to the Philly Fed survey (yellow bar).
Comparing Surveys to Hard Data:
In the above graphic, hard data is the long bars, and surveys are the short bars. The arrows on the left side are the key to growth or contraction.
Caveats on the use of Philly Fed Business Outlook Survey:
This is a survey, a quantification of opinion - not facts and data. Surveys lead hard data by weeks to months, and can provide early insight into changing conditions. Econintersect finds they do not necessarily end up being consistent compared to hard economic data that comes later, and can miss economic turning points.
This survey is very noisy - and recently showed recessionary conditions. And it is understood from 3Q2011 GDP that the economy was expanding even though this index was in contraction territory. On the positive side, it hit the start and finish of the 2007 recession exactly.
No survey is accurate in projecting employment - and the Philly Fed Business Outlook Survey is no exception. Although there are some general correlation in trends, month-to-month movements have not correlated with the BLS Service Sector Employment data.
Over time, there is a general correlation with real business data - but month-to-month conflicts are frequent.
>>>>> Scroll down to view and make comments <<<<<<
Permanent link to most recent post on this topic
Econintersect Economic Releases
|.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet|
|Asia / Pacific|
|Middle East / Africa|
This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved