Philadelphia Feeling: Federal Reserve Bank of Philadelphia Business Outlook Survey September 2011

The latest release of the Federal Reserve Bank of Philadelphia Business Outlook Survey (BOS) for September continued to indicate dramatic weakness in the regions manufacturing activity with the current activity index remaining at a notable contraction level of -17.5 while the future activity index improved to a level of 21.4.

The current activity index along with most of the other "current" data points (new orders, unfilled orders, delivery time and inventories) are now indicating significant recessionary weakness in manufacturing activity with the size and breadth of the latest pullback clearly demanding that closer scrutiny be paid to these series in future releases.

The following chart shows the current and future activity indexes both with their corresponding 3-month moving averages. The red line marks the threshold between contraction and expansion for these diffusion indexes.