Economy
Philadelphia Fed Continues to Show Little or No Growth in May
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The Federal Reserve Bank of Philadelphia has released its manufacturing business outlook survey results for the month of May. Manufacturing growth in the region was tenuous in May, but the diffusion index for current activity was in the red at −1.8 this month. Bloomberg had the consensus estimate up at 3.0, and the prior reading from April was −1.6.
Instead of improving as was expected, the report went deeper into the red. Manufacturing firms were asked about expected changes in prices received for goods and services over the next year.
Other broad indicators also reflected general weakness in business conditions. It was noted by the Philly Fed that the indicator for employment improved but remained negative. Manufacturers’ forecasts of future activity tempered slightly from last month, overall, but continue to suggest confidence in future growth.
The summary quote pretty much sums up this report, minus the overall negative disappointment:
This month’s Manufacturing Business Outlook Survey suggests essentially no growth of the region’s manufacturing sector. The survey’s indicators for general activity, new orders, shipments, and employment all remained negative. Though indicators for future conditions fell from last month, expectations for future growth continue to be positive.
Additional data showed that the Philly Fed’s current indicators remain weak. These were shown as follows:
Prices for inputs and for goods rose slightly, which is something that plays into the Federal Reserve’s current goal of a 2.0% to 2.5% inflation target. These were shown as follows:
Additional data showed that the manufacturing outlook remains positive. The future indicators fell from last month’s readings, but they continue to suggest that the current weakness is expected to be temporary. The diffusion index for future general activity fell from a 15-month high of 42.2 in April to 36.1 in May.
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