Must-know: Key leading economic indicators affecting bonds



What is the Business Outlook Survey?  

The Business Outlook Survey will be issued by the Philadelphia Fed on Thursday, February 20.

The Business Outlook Survey is a monthly survey of manufacturers conducted by the Federal Reserve Bank of Philadelphia. Survey participants indicate the direction of change in overall business activity and in the various measures of activity at their plants: employment, working hours, new and unfilled orders, shipments, inventories, delivery times, prices paid, and prices received. Primarily a manufacturing survey, this survey precedes the index of industrial production by nearly three weeks and so is known as a leading manufacturing indicator.

Part 4

The survey’s broadest indicators for general activity, new orders, shipments, and employment increased in January, implying that moderate growth should continue. The surveyʹs future activity indicators suggest that businesses expect growth in the first half of 2014.

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The survey’s headline number, the diffusion index of current activity, which concentrates on manufacturing, increased from a revised reading of 6.4 in December to 9.4 in January, its eighth consecutive positive reading. Other survey results included higher inflation pressures on the purchasing side for participants, with the prices paid index increasing 2 points, to 18.7. However, firms could not pass on those increases to customers, as the prices received index decreased 6 points, to 5.1.

Labor market indicators improved in January, with the current employment index increasing 6 points from its revised reading in December, with 23% of the firms reporting increases in employment in January—slightly higher than November’s 18%.

What do the housing indicators say? Find out in Part 5 of this series.


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