Philadelphia Fed Business Index for November -5.5 vs 8.0 estimate

• Prior 10.3
• Fed Business index -5.5 vs 8.0 estimate
• 6 month index 56.6 versus 36.7 last month. Big gain for the future index

• Capital expenditures 24.9 versus 23.5 last month
• employment 8.6 versus -2.2 last month.
• Prices paid 26.6 versus 29.7 last month.
• New orders 8.9 versus 14.2 last month

From the Philadelphia Fed:

• Manufacturing activity in the region softened overall, according to the firms responding to the November Manufacturing Business Outlook Survey. The survey’s indicator for current general activity turned negative, while the indexes for new orders and shipments declined but remained positive. The employment index turned positive, suggesting an increase in employment overall. Both price indexes indicate overall increases in prices and remain near their long-run averages. The firms continue to expect growth over the next six months, with growth expectations more widespread this month.
• Details on Prices: Both price indexes declined for the second consecutive month but remained positive. The prices paid index declined 3 points to 26.6. Nearly 27 percent of the firms reported increases in input prices, while none reported decreases; 67 percent of the firms reported no change. The current prices received index fell 4 points to 14.3. Over 15 percent of the firms reported increases in prices received for their own goods, 1 percent reported decreases, and 76 percent reported no change.

A special question firms expect inflation for the next year to remain unchanged at 3.0% still well above the 2.0% Fed target. :

Firms Expect Higher Increases in Own Prices

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 3.0 percent, up slightly from 2.8 percent when this question was last asked in August. The firms reported a median increase of 3.0 percent in their own prices over the past year, unchanged from last quarter. The firms expect their employee compensation costs (wages plus benefits on a per employee basis) to rise 3.4 percent over the next four quarters, down slightly from 3.5 percent in August. The firms’ median forecast for the rate of inflation for U.S. consumers over the next year was also unchanged at 3.0 percent.

This article was written by Greg Michalowski at www.forexlive.com.