Philadelphia Fed
Philadelphia Fed manufacturing index remains negative
  • Prior -31.3
  • Philly Fed business index -10.4 versus -19.8 expected
  • six-month index -10.3 versus -1.5 last month
  • capital expenditures index 2.5 versus -5.4 last month
  • employment index -8.6 versus -0.20 last month
  • price paid index +10.90 versus +8.2 last month
  • new orders index -8.9 versus -22.7 last month

The diffusion index for current general activity, reflecting the overall state of the economy, improved this month, rising from -31.3 to -10.4, although it remained negative for the ninth consecutive month. While about 35% of firms reported decreases in activity (consistent with last month), those reporting increases rose to 25% (up from 3%), with 41% reporting no change (down from 59%). Indicators for new orders and shipments saw incremental improvement, although they also remained in negative territory. The index for current new orders rose 14 points to -8.9, while the current shipments index nudged up 3 points to -4.7.

Regarding employment, firms, on balance, reported a downturn. The employment index dropped from -0.2 to -8.6, marking its third consecutive negative month. While a majority (76%) of firms reported no change in employment, 15% reported a decrease and just 7% noted an increase. The average workweek index saw little change, remaining at -7.7.

The prices paid diffusion index, which measures changes in input costs, rose slightly by 3 points to 10.9 after hitting a near three-year low last month. Over a quarter of firms reported an increase in input prices, while 15% saw decreases, and the majority (59%) saw no change. On the other hand, the current prices received index, reflecting changes in selling prices, fell 4 points to -7.0, marking its fourth consecutive decline and the lowest reading since April 2020. In this context, 22% of firms reported decreases in their own goods' prices, 15% reported increases, and a large majority (63%) reported no change.

In this month’s special questions, the firms were asked to forecast the changes in prices of their own products and for U.S. consumers over the next four quarters.

  • The prices paid diffusion index, a metric for input costs, rose marginally by 3 points to 10.9, after nearing a three-year low in the previous month.
  • Over 25% of firms reported an increase in input prices, 15% reported decreases, and the majority (59%) observed no change.
  • The current prices received index, representing changes in selling prices, declined 4 points to -7.0, its fourth consecutive drop and the lowest since April 2020.
  • Within this context, 22% of firms reported decreases in their own goods' prices, while 15% noted increases, and a significant majority (63%) saw no change.

/inflation