Econoday Report: Philadelphia Fed Survey 18, 2006

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Philadelphia Fed Survey

Definition
The general conditions index from this business outlook survey is a diffusion index of manufacturing conditions within the Philadelphia Federal Reserve district. This survey, widely followed as an indicator of manufacturing sector trends, is correlated with the ISM manufacturing index and the index of industrial production. Why Investors Care

Released on 5/18/06 For May 2006

General Business Conditions Index, Level
Actual	14.4
Consensus	14.0
Consensus Range	11.0 to 20.0
Previous	13.2

Highlights
The Philadelphia Federal Reserve's business activity index edged higher in May to 14.4 from 13.2 in April. But growth in new orders dropped sharply to 2.7 from 12.2 pointing to slowing activity in the months ahead. Unfilled orders contracted, at -2.2 from 7.0. Most readings in fact were very soft, including a sharp decline in the employment index to 1.1 from 21.7 and a decline in shipments to 11.7 from 19.0. But not surprisingly price pressures remain, jumping to 55.3 for prices paid from 29.0 and reflecting higher energy prices. Note that the main index is the sum to a single question, not a composite of sub-indexes. The financial markets are likely to key on the sub-indexes, especially the new orders reading which is a negative for the dollar and a plus for bonds. This report is used as a gauge for the monthly ISM manufacturing report, expectations for which are likely to ease.

Market Consensus Before Announcement
The general business conditions component of the Philadelphia Fed's business outlook survey inched up to 13.2 in April from a level of 12.3 in March. While overall levels are somewhat lower than the Empire State manufacturing survey, any level above zero indicates growth in manufacturing activity.

Philadelphia Fed survey Consensus Forecast for May 06: 14
Range: 11 to 20

Trends

The Philadelphia Fed's business outlook survey is a good leading indicator for the index of industrial production. It is reported in the third week of the month and thus has a lead time of nearly three weeks.

Data Source: Haver Analytics

2006 Release Schedule

Released On: 1/19 2/16 3/16 4/20 5/18 6/15 7/20 8/17 9/21 10/19 11/16 12/21

Released For: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec