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Philadelphia Fed December Outlook Suggests Continued Growth
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Results from the Business Outlook Survey suggest that regional manufacturing conditions continued to improve in December. All of the broad indicators remained positive and suggest an expansion of activity. Increases in input prices were more widespread this month, and more firms reported increases in prices for their manufactured goods. The survey’s broad indicators of future activity suggest that optimism among the region’s manufacturing executives also continues to improve.
Indicators Suggest Continued Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from a reading of 22.5 in November to 24.3 in December. The index has been positive for three consecutive months (see Chart). The demand for manufactured goods is showing continued improvement: The new orders index increased 4 points this month and has increased for three consecutive months. The shipments index declined 10 points, but it has remained positive for three consecutive months.
Firms’ responses continue to suggest that labor market conditions are improving.
For the fourth consecutive month, the percentage of firms reporting an increase in employment (17 percent) is higher than the percentage reporting a decline (12 percent). Although the overall employment index fell 8 points, the workweek index increased 8 points, and it has increased sharply over the past three months.
Posted: December 16, 2010 Thursday 10:00 AM