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Philadelphia Fed Business Outlook Survey  
Released On 10/18/2018 8:30:00 AM For Oct, 2018
PriorConsensusConsensus RangeActual
General Business Conditions Index - Level22.9 20.0 16.2  to 22.9 22.2 

Highlights
Much like the Empire State report released earlier this week, the Philly Fed report for October shows strong growth in new orders and a welcome working down of backlog orders. First let's look at October's headline which came in at a very strong and higher-than-expected 22.2 which is right at the average for this index over the past year.

Now the details which are led by new orders, posting a very solid 19.3 and down only slightly from September. The big positive is an outright contraction in backlog orders which came in at minus 2.3 vs a highly elevated 12.6 in September. This suggests that Philly's sample, like the sample for Empire State, is getting ahead of orders and that capacity constraints are no longer slowing production or delaying shipments, the latter rising nearly 5 points to 24.5 in this report. Delivery times in both reports are improving this month with pressures on input costs easing slightly.

But there is still plenty of supply-side pressure in Philly's sample as the workweek is extending this month, up more than 6 points to 20.8, with hiring up nearly 2 points to a very strong 19.5.

This report points to solid conditions going into year end, both on the demand side and the supply side, for a factory sector that may well be, along with employment, the central strengths of the 2018 economy.

Consensus Outlook
Slightly easing strength to 20.0 is the call for October's Philly Fed manufacturing index which surged in September to 22.9. September's report was strong throughout, led by acceleration in both new orders and backlogs and including a noticeable draw in inventories that likely reflected delivery and production limitations.

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
 
[Chart]
The Philadelphia Fed's business outlook survey offers advance indications on the industrial production index. The survey is reported in the third week of the month and has a lead time of nearly three weeks on industrial production.
Data Source: Haver Analytics
 
 

2018 Release Schedule
Released On: 1/182/153/154/195/176/217/198/169/2010/1811/1512/20
Release For: JanFebMarAprMayJunJulAugSepOctNovDec
 


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