Philly Fed Index Shows Weakest Reading Since October 2001
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US equity markets slipped lower following the release of the Philadelphia Fed Index at 10AM, which coincided with the Fed Chairman Ben Bernanke's testimony to the US House of Representatives. Both heightened recession fears.
The Philly Fed Index, which measures manufacturing conditions, fell sharply from a revised reading of -1.6 in December to -20.9, its lowest reading since October 2001.
The survey showed that 41% of firms reported decreases in manufacturing activity. 40% reported no change and only 20% reported increases in activity.
Demand for manufactured goods, as represented by the survey’s new orders index, fell dramatically, from a revised reading of 12.0 in December to -15.2, its first negative reading in 15 months.
The current shipments index fell 17 points, from 15.0 to -2.3. Indexes for both unfilled orders and delivery times remained negative.
The percentage of firms reporting a decrease in employment (22 percent) was slightly greater than the percentage reporting an increase (21 percent), and the current employment index declined four points, to its first negative reading since September 2003.
A sizable share of firms reported higher prices for inputs this month.
The summary of the survey said, "The region’s manufacturing sector weakened in January, as evidenced by negative readings of the indexes for activity, new orders, shipments, employment, and average hours worked. Price pressures were also elevated this month; more firms reported increases in input prices and price increases for their own manufactured goods. Firms’ expectations for future activity have deteriorated sharply over the past three months. On the positive side, more firms expect growth over the next six months than expect declines, and nearly 39 percent of firms expect to increase hiring over the first half of the year."
The Philly Fed Index, which measures manufacturing conditions, fell sharply from a revised reading of -1.6 in December to -20.9, its lowest reading since October 2001.
The survey showed that 41% of firms reported decreases in manufacturing activity. 40% reported no change and only 20% reported increases in activity.
Demand for manufactured goods, as represented by the survey’s new orders index, fell dramatically, from a revised reading of 12.0 in December to -15.2, its first negative reading in 15 months.
The current shipments index fell 17 points, from 15.0 to -2.3. Indexes for both unfilled orders and delivery times remained negative.
The percentage of firms reporting a decrease in employment (22 percent) was slightly greater than the percentage reporting an increase (21 percent), and the current employment index declined four points, to its first negative reading since September 2003.
A sizable share of firms reported higher prices for inputs this month.
The summary of the survey said, "The region’s manufacturing sector weakened in January, as evidenced by negative readings of the indexes for activity, new orders, shipments, employment, and average hours worked. Price pressures were also elevated this month; more firms reported increases in input prices and price increases for their own manufactured goods. Firms’ expectations for future activity have deteriorated sharply over the past three months. On the positive side, more firms expect growth over the next six months than expect declines, and nearly 39 percent of firms expect to increase hiring over the first half of the year."
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