Philadelphia Fed Manufacturing Index

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Definition of 'Philadelphia Fed Manufacturing Index'

The Philadelphia Fed Manufacturing Index is a monthly survey of manufacturing companies in the Third Federal Reserve District, which includes parts of Pennsylvania, New Jersey, and Delaware. The survey is conducted by the Federal Reserve Bank of Philadelphia and provides an indicator of the health of the manufacturing sector in the region.

The survey asks manufacturing firms to report on various aspects of their business, such as new orders, shipments, employment, and inventories. The index is calculated by taking a weighted average of the survey responses, with values above zero indicating expansion in the manufacturing sector and values below zero indicating contraction.

The Philadelphia Fed Manufacturing Index is considered a leading economic indicator as it provides insights into the health of the manufacturing sector and broader economic conditions in the region. A higher index value suggests strong economic activity in the manufacturing sector, which can contribute to overall economic growth, while a lower value indicates weak economic conditions.

The Philadelphia Fed Manufacturing Index is closely watched by investors, policymakers, and analysts as an indicator of regional economic conditions and trends in industrial production, employment, and inflation. The index is also used to anticipate changes in the national-level indicators, such as the ISM Manufacturing Index and GDP growth.

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