Philly Fed Preview

The Federal Reserve Bank of Philadelphia will release the monthly Philadelphia Fed Business Outlook Survey, or Philly Fed, at 10:00 a.m. ET. Consensus is for a reading of 7.5, with estimates ranging from 5 to 10.5 according to Bloomberg News. The Philly Fed is designed so readings above zero indicate economic expansion, with readings below zero showing contraction.

The Philly Fed is a widely followed index of manufacturing conditions within the Philadelphia Federal Reserve district and displays a strong correlation to the ISM manufacturing index and industrial production. The Philadelphia Fed report showed muted strength last month for June, with a headline reading of 5.7, missing expectations of a reading of 12. July forecasts expect better strength this month at a 7.5 consensus, which would show solid, if not strong growth.

With some of the Philly Fed sub-indexes comprised of commodity prices, the inflationary effect may be muted due to the recent weakness in oil and other commodities.

In front of the release, S&P 500 futures were showing a loss of 0.40 percent.