Philly Survey: Notable Pullback in Manufacturing Activity

by: Sold At The Top

The latest release of the Federal Reserve Bank of Philadelphia Business Outlook Survey for June indicated a continued notable pullback in the region's manufacturing activity with the current activity index plunging to a level of -7.7 while the future activity index also declined to a level of 2.5.

The current activity index along with four additional current data points (new orders, unfilled orders, delivery time and inventories) are now indicating contraction of manufacturing activity with the size and breadth of the latest pullback, clearly demanding that closer scrutiny be paid to these series in future releases.

The following chart shows the current and future activity indexes both with their corresponding three-month moving averages. The red line marks the threshold between contraction and expansion for these diffusion indexes.

Click to enlarge