Philadelphia Fed New Orders Index shows a change in the number of new orders received by leading manufacturers in the Philadelphia Fed region. This region includes Pennsylvania, New Jersey and Delaware, i.e. states with high economic activity. So, this index often correlates with the national one.
The index of new orders is calculated based on a survey of leading manufacturing companies in the region. Business leaders are asked to assess whether the situation in their companies has improved, worsened or remained unchanged. In addition to new orders, the survey also includes an assessment of the number of unfilled orders, shipment, delivery times, inventories, prices received, number of employees, average hours worked per week. Also, respondents are asked to assess the overall level of business activity in their sector. Answers in two time intervals are expected: evaluation of the last month and a forecast for the next six months.
The index is calculated as a difference between the percentage of positive estimates and the percentage of negative ones. If the final index value is positive, it means that the prices paid by manufacturers have increased on the average across the region. Readings below zero indicate a decrease in the prices paid.
The region falling under the responsibility of the Philadelphia Federal Reserve Bank is one of the most economically active regions of the country, that is why the index of new orders is usually monitored by analysts and considered to be an indirect leading indicator of the US economy state. An increase in the number of new orders can be a leading indicator of production activity in the region, since it causes a near-term production growth.
Dynamics of the Philadelphia Fed New Orders index can cause insignificant volatility of dollar quotes.
The chart of the entire available history of the "Federal Reserve Bank (Fed) of Philadelphia New Orders" macroeconomic indicator. The dashed line shows the forecast values of the economic indicator for the specified dates.
A significant deviation of a real value from a forecast one may cause a short-term strengthening or weakening of a national currency in the Forex market. The threshold values of the indicators signaling the approach of the critical state of the national (local) economy occupy a special place.
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