Philadelphia Fed Manufacturing Index rates general business conditions in the city of Philadelphia. 250 executives take part in the survey to provide the Federal Reserve Bank of Philadelphia with actual data. A reading above zero indicates the expansion of the city’s economic potential, a reading below zero — the contraction.
Why is it important?
Philadelphia is the fifth-largest city in terms of population in the United States. With a gross domestic product of $388 billion, it ranks ninth among world cities and fourth in the U.S. Financial services and information technology are the foundation of Philadelphia’s economy of today. The city is expected to behave in the same way the general U.S. economy does. Worsening economic conditions in Philadelphia can be a sign of an upcoming recession in the nation as a whole.
Practical application
A higher than expected reading should be taken as bullish for the USD, while a lower than expected reading should be taken as bearish for the USD.
