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Philadelphia Fed October Outlook Suggest Steady Activity
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Results from the Business Outlook Survey suggest that regional manufacturing activity was steady in October. Although the broad survey measures showed marginal improvement this month, the new orders index continued to suggest weak demand for manufactured goods. More firms reported increases in input prices this month, although the prices of firms’ manufactured goods continued to decline. The survey’s broad indicators of future activity suggest that optimism among the region’s manufacturing executives improved notably this month.
Indicators Suggest Steady Activity
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of –0.7 in September to 1.0 in October. The index had been negative for two consecutive months (see Chart). Indexes for new orders and shipments continued to indicate weakness this month: The new orders index increased 3 points but remained negative for the fourth consecutive month. The shipments index increased 9 points, moving the index above zero for the first time in three months. Firms continue to report overall declines in inventories and unfilled orders and shorter delivery times.
Firms reported near steady employment again this month, but lower average work hours for existing employees. The percentage of firms reporting increases in employment (20 percent) narrowly edged out the percentage of firms reporting decreases (17 percent). The index for employment was slightly positive for the second consecutive month but increased just 1 point. Indicative of still weak activity, more firms reported declines in average work hours for existing employees (22 percent) than reported increases (16 percent).
Posted: October 21, 2010 Thursday 10:00 AM