David Moenning

About the Author David Moenning

David Moenning is a the Chief Investment Officer at Heritage Capital, which focuses on active risk management of the U.S. stock market. Dave is also the proprietor of StateoftheMarkets.com, which provides free and subscription-based portfolio services. Dave began his investment career in 1980 and has been an independent money manager since 1987. Thus, Dave has been live on the firing line and investing for a living for more than 25 years.

Philly Fed Index Turns South in September

Economic Update: Philadelphia Fed Index

According to firms responding to this month’s Manufacturing Business Outlook Survey, manufacturing activity in the Philadelphia Fed region declined in September.

The report indicates the indicator for general activity fell into negative territory, but indicators for new orders, shipments, and employment remained positive.

The Business Outlook Index for September was reported at -6.0, which was below the consensus for a reading of +6.0 and also below last month’s reading of +8.3 (July: +5.7).

According to the report, ”Evidence suggests that the responses regarding general activity that were received earlier in the month may have been negatively affected by the volatility in the stock market and international news reports. Firms reported essentially unchanged prices for raw materials and other inputs in September and slight declines in prices for their own products. The survey’s indicators of future activity remained near their readings in August, indicating that firms expect a continuation of growth in the manufacturing sector over the next six months.”

The New Orders index was reported at +9.4, which a drop from last month’s reading of +5.8.

On the subject of jobs, “firms’ responses suggest some improvement in employment conditions in September despite the reported lull in overall activity. The percentage of firms reporting an increase in employees in September (21 percent) was higher than the percentage reporting a decrease (11 percent). The current employment index increased 5 points, its highest reading in five months. Firms also reported, on balance, a modest increase in the workweek similar to August.”

According to Investopedia, the Philly Fed Index is a regional federal-reserve-bank index measuring changes in business growth. The index is constructed from a survey of participants who voluntarily answer questions regarding the direction of change in their overall business activities. The survey is a measure of regional manufacturing growth. When the index is above 0 it indicates factory-sector growth, and when below 0 indicates contraction.


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