Yesterday, the second survey for 2013 of the Philly Fed Manufacturing Index for February came out. This survey projects the U.S. manufacturing conditions. Based to the recent update the conditions have deteriorated again. Moreover, the index remained negative; the Philly Fed index decreased from -5.8 in January to -12.5 in February. This is a 6.7 point drop. Alternatively, employment has slightly improved during the month. Indexes of prices declined again during the month for the second month in a row; this might imply the price pressures have eased. The American stock markets traded moderately down during yesterday. Gold and silver prices traded moderately up.
If this indicator provides a good estimate for the economic changes of the U.S, it may suggest the negative shift in the manufacturing sectors continues. This index may also suggest the economic conditions have deteriorated during February 2013 compared with the manufacturing conditions during January 2013. On the other hand, the survey estimated the general employment conditions have slightly improved during recent weeks.
This report presents the U.S economy isn’t growing in its manufacturing. Moreover, this survey could be reviewed as a preview for the growth rate of the U.S GDP in the first quarter of 2013 that might not be any better than the GDP growth rate in the fourth quarter of 2012: Since the manufacturing has deteriorated, this could suggest that the U.S GDP growth rate in the first quarter might decline compared to the fourth quarter.
This report might adversely affect not only American stock markets, but also the rates of major commodities such as crude oil and natural gas.
Following the publication of this report major American stock market indexes including the Dow, S&P500 and NASDAQ have slightly declined (even though correlation doesn’t necessarily means causation) ; major energy commodities prices such as crude oil also declined; precious metals were traded slightly up.
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