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FBaggins

(26,697 posts)
Thu Jun 18, 2020, 09:35 AM Jun 2020

Philly Fed Manufacturing Index jumps to 27.5 in June vs. -23 expected

The headline Diffusion Index of the Federal Reserve Bank of Philadelphia's Manufacturing Business Outlook Survey improved surged to 27.5 in June from -43.1 in May. This print came in much higher than the market expectation of -23.

Key takeaways

"The current new orders index increased 42 points to 16.7, while the shipments index rose 56 points to 25.3."

"The firms continued to report decreases in employment on balance; however, the employment index increased 11 points."

"The diffusion index for future general activity increased 17 points from its May reading, reaching its highest level in nearly 30 years."

"Responses to the June Manufacturing Business Outlook Survey suggest improvement in regional manufacturing conditions compared with last month."


https://www.fxstreet.com/news/us-philly-fed-manufacturing-index-jumps-to-275-in-june-vs-23-expected-202006181255


First positive reading since February
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Philly Fed Manufacturing Index jumps to 27.5 in June vs. -23 expected (Original Post) FBaggins Jun 2020 OP
Year on year or month to month? More FAKE SPIN JT45242 Jun 2020 #1
You appear to have confused multiple reports FBaggins Jun 2020 #2
They Predicted -23%??? ProfessorGAC Jun 2020 #3
It's a diffusion index - not a measure of output. FBaggins Jun 2020 #4
Still Highly Suspect ProfessorGAC Jun 2020 #5
That seems circular FBaggins Jun 2020 #6
We Disagree ProfessorGAC Jun 2020 #7

JT45242

(2,173 posts)
1. Year on year or month to month? More FAKE SPIN
Thu Jun 18, 2020, 10:25 AM
Jun 2020

Two things ...

That is month to month.

Anything this low is God awful.

So, to reiterate.

May not nearly as shitty as April but still God awful and in the Great Recession it was NEVER BELOW 20!!!!

This is shoddy reporting trying to make the economy look much better than it is.

[link:https://www.instituteforsupplymanagement.org/files/Pubs/Proceedings/2010ProcFG-Ore-Kasi.pdf|

FBaggins

(26,697 posts)
2. You appear to have confused multiple reports
Thu Jun 18, 2020, 12:50 PM
Jun 2020

Last edited Thu Jun 18, 2020, 01:37 PM - Edit history (1)

This isn't the ISM. It's a manufacturing index for just the Philly Fed's area and runs on a different scale (with expansion/contraction turning on 0 rather than 50). It was well below 20 for the entire GR (in fact, it was only briefly above 20 between 2006 and 2011.)

The number is far from "God awful"

Perhaps you missed the forward-looking next-6-months figure?

The diffusion index for future general activity increased 17 points from its May reading, reaching its highest level in nearly 30 years.

?w=600&la=en

ProfessorGAC

(64,427 posts)
3. They Predicted -23%???
Thu Jun 18, 2020, 01:15 PM
Jun 2020

That calls into question their methodology.
Nationwide, the elements of GDP involving manufacturing were functioning at 84.6%, and rising since May 1.
Philly is NOT that dissimilar from the country as a whole, economically.
So, -23% was a ridiculous projection in the first place.
It would have required a 50% relative fall in manufacturing performance as things were reopening.
Somebody messed up when this projection was developed.

FBaggins

(26,697 posts)
4. It's a diffusion index - not a measure of output.
Thu Jun 18, 2020, 01:49 PM
Jun 2020

So a -23 figure implied that they expected 23% more firms to report that general activity was down this month than those saying that it was up. Instead, 46% of firms in the survey reported increases in general activity while only 19% reported decreases... but it's just "up/down/no-change"... not a measure of how much the output itself was changing.

ProfessorGAC

(64,427 posts)
5. Still Highly Suspect
Thu Jun 18, 2020, 02:11 PM
Jun 2020

The very fact it was so wrong should give us pause about the credibility of the numbers.

FBaggins

(26,697 posts)
6. That seems circular
Thu Jun 18, 2020, 08:15 PM
Jun 2020

I’d say that it’s far more plausible that economic conditions unlike any that have occurred before make it hard for even seasoned economists to make accurate predictions (as with the employment figures).

ProfessorGAC

(64,427 posts)
7. We Disagree
Thu Jun 18, 2020, 08:21 PM
Jun 2020

We've had national crises before.
The basics of econometric projections have been unchanged since before WW2. Math didn't change because of the virus.
Secondly, there was nothing circular about what I said. Not a thing. I don't get trapped in circular logic.
They got a number so wrong, it is foolish to believe that during the same "extraordinary" event period that suddenly becomes more reliable.
Thinking it now magically becomes the predictive truth is the circular argument.
I'm not the one doing that.

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