The general business conditions index in the Philadelphia Fed manufacturing outlook survey is minus 5.9 in November, up from minus 9.0 in October. The November reading is above the consensus of minus 11.0 in the Econoday survey of forecasters. With the exception of August 2022 and August 2023, the index has reflected contraction in current business conditions since June 2022. However, the sluggishness in the regional factory sector appears to be lifting a bit.

The future business conditions index for November fell to minus 2.1 after 9.2 in October and is the first negative since minus 10.3 in May. The decline is likely the result of concerns about persistent inflation and/or higher financing costs related to Fed monetary policy, and the uncertainties in the geopolitical outlook.

The general business conditions indexes are diffusion indexes and reflect reported perceptions and are not calculated from component indexes. As such, the detail indexes may tell a slightly different story. In November, the details suggest softer activity overall.

The index for new orders is down to 1.3 in November after 4.4 in October but remains positive for a second month in a row. There hasn't been a back-to-back positive reading since April-May 2022. The index for order backlogs shows slower contraction at minus 9.8 in November after minus 16.8 in October. The shipments index falls to minus 17.9 after 10.8 in the prior month. Factories have little work in the pipeline to maintain activity.

The employment index in November is down to 0.8 after 4.0 in October. Manufacturers are hiring less. The average workweek index contracts sharply at minus 11.4 in November after minus 4.3 in October. Manufacturers are cutting hours, possibly to avoid laying off workers.

The index for delivery times points to no delay in moving materials. The index is up to minus 8.7 in November after minus 21.4 in October. The supply chain is consistent with slow economic growth.

The index for prices paid is down to 14.8 in November after 23.1 in October. The easing in price pressures is related to falling energy prices. The index for prices received is essentially unchanged at 14.8 in November after 14.6 in October, and has been virtually the same for the past four months. Businesses are passing on at least some higher costs, but not as aggressively as in much of the past two years.

The Philadelphia Fed manufacturing index in November is expected to edge lower to minus 11.0 versus October's minus 9.0 in a report, however, that showed increases for both new orders and shipments.

The general conditions index from this business outlook survey is a diffusion index of manufacturing conditions within the Philadelphia Federal Reserve district. This survey, widely followed as an indicator of manufacturing sector trends, is correlated with the ISM manufacturing index and the index of industrial production.

Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. By tracking economic data such as the Philly Fed survey, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more moderate growth so that it won't lead to inflation. The Philly Fed survey gives a detailed look at the manufacturing sector, how busy it is and where things are headed. Since manufacturing is a major sector of the economy, this report has a big influence on market behavior. Some of the Philly Fed sub-indexes also provide insight on commodity prices and other clues on inflation. The bond market is highly sensitive to this report because it is released early in the month and is available before other important indicators.