PHILLY FED SURVEY RESUMES DECLINE

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased 16 points, to a reading of ‐10.7. The fallback of the general activity index followed a single positive reading in October that was preceded by five negative monthly readings.

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Nearly 32 percent of firms reported declines in activity this month, while 21 percent reported increases. The demand for manufactured goods, as measured by the current new orders index, declined 4 points from last month and remains in negative territory. Shipments also fell this month: The current shipments index fell 7 points, to ‐6.7. Declines in inventories
were also more widespread this month; 31 percent of firms reported declines compared with 21 percent in October.

Labor market conditions at the reporting firms remained weak this month. The current employment index, at ‐6.8, was slightly improved
from its negative reading in October (‐10.7) but has remained negative for five consecutive months. The percentage of firms reporting decreases in employment (20 percent) exceeded the percentage reporting increases
(13 percent). Firms also indicated fewer hours worked: The average workweek index was virtually unchanged but posted its eighth consecutive negative reading.

imageHurricane Sandy, which passed through the region in the final days of October: The average number of days on which firms experienced reduced activity was 2.2. Nearly a third of the firms indicated that activity was reduced for three days or more. Out of the number of days on which activity was reduced, the average length of time that businesses were either shut down or severely crippled was 1.3 days.

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