Federal Reserve Bank (Fed) of Philadelphia Employment

Philadelphia Fed Employment Index reflects labor market conditions in the industrial sector in the Philadelphia Federal Reserve zone. This region includes Pennsylvania, New Jersey and Delaware, i.e. states with high economic activity. Business conditions here can be extrapolated throughout the country.

The index is calculated based on a monthly survey of large manufacturing companies in the region. Company management representatives are asked to assess current business conditions in the manufacturing sector. The survey contains a question on the number of employees in the company, which belongs to the employment index. The survey participants are asked to provide relative estimates: whether figures have increased, decreased or remain unchanged. Answers in two time intervals are expected: evaluation of the last month and a forecast for the next six months.

Positive index readings indicate that employment has increased on the average across the region. Values below zero indicate weakening of employment in the manufacturing segment of the economy.

Analysts often pay attention to this index component, since the labor market activity is one of the leading factors of the US inflation. Employment growth suggests an increase in consumption, which is a favorable factor for the development of the economy. Manufacturing sector in the region creates most of the jobs, so employment in this sector is a representative indicator of the overall situation. Dynamics of the Philadelphia Fed Employment index can cause insignificant volatility of dollar quotes.