- Philly Fed business index +12.0 vs -10.0 expected
- First positive reading since last August
- Prior was -13.5
- six-month index +3.9 versus +29.1 last month
- capital expenditures index -4.5 versus +8.6 last month
- employment index -6 versus -1 last month
- price paid index +20.8 versus +9.5 last month
- new orders index +16.0 versus -15.9 last month
The details are tough to square. New orders surged but the six-month index retreated and so did capex and employment.
The diffusion index for current general activity rose from a reading of -13.5 last month to 12.0 this month, its first positive reading since August 2022. Almost 25 percent of the firms reported increases (up from 17 percent from last month), exceeding the 13 percent reporting decreases (down from 30 percent); 58 percent of the firms reported no change in current activity (up from 49 percent last month). The index for new orders — which had been negative for 14 consecutive months — climbed 32 points to 16.0, and the shipments index rose 18 points to 5.7.
On balance, the firms reported a decline in employment, and the employment index moved down 5 points to -6.0. Over 18 percent of the firms reported a decrease in employment, compared with 12 percent that reported an increase; most firms (70 percent) reported no change. The average workweek index rose 9 points to 6.3.
Firms reported overall increases in prices, but both price indexes remain near their long-run averages. 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. Regarding their own prices over the next year, the firms’ median forecast was for an expected increase of 4.0 percent, down from 4.5 percent when this question was last asked in May. The firms reported a median increase of 5.0 percent in their own prices over the past year, down from 6.0 percent last quarter. The firms’ median forecast for the rate of inflation for US consumers over the next year was 4.0 percent, down from 5.0 percent in May. Over the long run, the firms’ median forecast for the 10-year average inflation rate was 3.5 percent, up slightly from 3.3 percent.