Research >> Economics
Philadelphia Fed June Outlook Suggest Slower Growth
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Results from the Business Outlook Survey suggest that regional manufacturing activity continues to expand in June, but at a slower pace than in May. Surveyed firms reported no expansion of overall employment and work hours compared with May. Fewer firms also reported increases in prices of inputs this month. The survey’s broad indicators of future activity continued to suggest that the region’s manufacturing executives still expect growth in business over the next six months.
Some Indicators Suggest Slower Growth
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased notably from a reading of 21.4 in May to 8.0 in June. The index, which had edged higher for four consecutive months, fell back to its lowest reading in 10 months (see Chart). Although still positive and suggesting growth, indexes for new orders and shipments showed a mixed pattern this month — the new orders index increased 3 points, while the shipments index decreased 2 points. The current inventory index increased 13 points and moved back from a negative reading into positive territory, suggesting an increase in inventories this month.
Until this month, firms’ responses had been suggesting that labor market conditions were improving, but indexes for current employment and work hours were both slightly negative. For the first time in seven months, more firms reported a decrease in employment (18 percent) than reported an increase (17 percent). The largest percentage (62 percent), however, reported steady employment levels. The workweek index also declined into negative territory, its first negative reading in eight months.
Posted: June 17, 2010 Thursday 10:00 AM