U.S. Economy

The Philly Fed Business Outlook Survey’s Positive Surprise

by Glenn Busch December 15, 2011
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The Empire State Manufacturing Index is not the only regional manufacturing report out today nor is it the only one with a positive surprise. The Philadelphia Federal Reserve Business Outlook Survey was released today too and it showed a strong gain as well. The diffusion index of current activity, the survey’s broadest measure of manufacturing conditions, remained positive for the third consecutive month and increased from 3.6 in November to 10.3 (see Chart).

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Empire State Manufacturing Index Back Above Zero

by Glenn Busch December 15, 2011
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The Empire State Manufacturing Index finally gets back above its zero line. For this diffusion index any number below zero indicates contraction and any number above zero indicates expansion. The Empire State Manufacturing Survey indicates that manufacturing activity improved in New York State in December. The general business conditions index rose nine points to 9.5, its highest level since May.

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Chicago PMI at 7 Month High

by Glenn Busch November 30, 2011
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The Chicago PMI, considered the advance lead on the national ISM, rebounded today to hit a 7 month high and is in its 26th month of expansion. The business barometer came in at a reading of 62.6, blowing away the consensus expectation of 58.5.

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Personal Income and Consumption Improve, Savings Rate Delcines

by Glenn Busch November 23, 2011
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The Personal Income and Consumption Expenditures provides information about U.S. households, 70% of the U.S. economy. It can be viewed as another gauge on consumer confidence. The October 2011 report was released this morning.

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The National ISM Disappoints

by Glenn Busch November 1, 2011
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Yesterday’s Chicago PMI was a reliable indicator of today’s drop in the National ISM. Recently the spread between the two manufacturing surveys has been about 8 points and yesterday’s Chicago PMI of 58.4 hinted towards a national ISM of 50. This morning the national ISM came in at 50.8. The consensus was for an increase to 52 from 51.6 in September.

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Chicago PMI Down but Better Than Expected

by Glenn Busch October 31, 2011
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Market reaction to the Chicago PMI can be strong since it is released a day or two ahead of the national ISM and it has a strong correlation with the national ISM too. Usually, the Chicago PMI comes in a few points above the national ISM and with a reading around 58 we would see a reading near 56. Recently the spread has been wider with September’s spread at 8 points If this spread continues the national ISM will come in around 50 and possibly below.

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Orders for Durable Goods, Better Than Expected

by Glenn Busch October 26, 2011
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The other key component of the report that provides more good news is the orders for non-defense capital goods excluding aircraft. This is the key gauge of capital spending for U.S. businesses. Changes in capital spending coincide with business confidence levels. Businesses will only increase their spending if the returns on their investments are there.

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Manufacturing Activity in Central Atlantic Region Continues to Contract

by Glenn Busch October 25, 2011
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The good news bad news see-saw continues for the U.S. economy. Yesterday The Chicago Fed showed a gain and then this morning the Federal Reserve Bank of Richmond released their manufacturing survey for the central-Atlantic region and it came in weak again.

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National Economic Activity Picked up in September

by Glenn Busch October 25, 2011
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Yesterday the Chicago Fed released their National Activity Index for the month of September. While still a negative number the index improved from a reading of -0.59 in August to a reading of -0.22. A negative number does not mean contraction. Zero is measured as the normal growth rate for the U.S. economy. Any number above zero means the economy is growing at an above-average rate and any number below zero means an economy is growing at below-average rates.

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The Philadelphia Federal Reserve Business Outlook Survey is Positive

by Glenn Busch October 20, 2011
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After months of bad news and negative numbers the October Business Outlook Survey from the Federal Reserve Bank of Philadelphia comes back strong with a positive number. The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from ‐17.5 in September to 8.7, the first positive reading in three months (see Chart).

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