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 PHILADELPHIA, Aug. 4 /PRNewswire/ -- The Philadelphia economy continued to show signs of stabilization after a deep recession, according to the latest reading of the Mellon PSFS economic index.
 The Mellon PSFS Coincident Index, which tracks monthly civilian employment, industrial electric power sales, retail sales, and nonfarm wages for the Philadelphia metro areas increased by 0.3 percent in May following a 0.1 percent gain in April.
 "The Mellon PSFS index has yet to mark a definite turning point for the Philadelphia metro area," said Richard Berner, senior vice president and chief economist, Mellon Bank. "However, the unemployment rate has tumbled from 7.8 percent last August to 6.9 percent this May, and it also is notable that nonfarm payrolls rose 7,700 in the last two months."
 Three of the four indicators moved up. Wages and salaries, and retail activity both registered gains of 0.3 percent and 0.9 percent respectively. Civilian employment inched up 0.1 percent and industrial power sales, which have improved significantly on a trend basis, dropped 0.2 percent for the month.
 "Steep declines in construction and trade jobs that were weighing down the local economy came to an end this spring," Berner added. "So the worst of the recession appears to be behind Philadelphia, and the Mellon PSFS index confirms the region is poised for recovery."
 -0- 8/4/93
 /EDITORS: For technical information on the Mellon coincident index, contact Cheryl O'Brien, regional specialist, at 412-234-1529. Statistical data follows.
 The composite index of coincident indicators was designed to monitor the current overall economic performance of the Philadelphia metro area (Bucks, Chester, Delaware, Montgomery and Philadelphia counties in Pennsylvania; Burlington, Camden and Gloucester counties in New Jersey). It combines four indicators of local activity:
 -- Civilian Employment
 Source: Bureau of Labor Statistics, Household Employment Survey
 -- Industrial Electric Power Sales
 Source: Penn State University, College of Business

 -- Real Retail Sales
 Source: Bureau of the Census retail sales report; adjusted with national retail sales deflator
 -- Real Nonfarm Wages and Salaries
 Source: Bureau of Economic Analysis and Mellon Bank estimates (A); adjusted with national wage deflator
 (A) Because U.S. metro area wage and salary data are only available annually through l99l, monthly estimates were calculated using relative wage rates for Philadelphia workers and local area nonfarm payroll employment.
 Development of the index: The index was constructed in accordance with the procedures developed by the Bureau of Economic Analysis for the U.S. Business Cycle Indicators series. The component series were selected to closely compare with the series included in the U.S. Coincident Index, and are given equal weights in the composite index. The timing of the local area data is as follows:
 -- Civilian employment: second Friday of the month; data for two months prior;
 -- Industrial power sales: last week of the month; data for prior month;
 -- Retail sales: mid-month; data for three months prior; and
 -- Nonfarm wages: second Friday of the month; data for two months prior
 The Philadelphia coincident index will generally be calculated and ready for publication following the release of retail sales data, mid-month.
 The U.S. coincident index is designed to track gross domestic product (GDP) monthly. To provide a corresponding target index for the Philadelphia index, the ratio of the national coincident index to national payroll employment times payroll jobs in Philadelphia was used. This is equivalent to adjustment subtracts 0.169 percent from the monthly change in the Philadelphia index.
 Percent Change in Actual Component Series(B)
 Apr 93- Mar 93- 12 month 6 month 3 month
 May 93 Apr 93 Span Span Span
 Civ. Employ. 0.1 -0.2 -0.5 -1.0 -0.5
 Ind. Sales -0.2 2.2 1.1 3.2 2.6
 Wg./Sal. 0.3 -0.4 -0.5 0.3 -0.1
 Retail Sales 0.9 1.4 4.9 3.7 1.3
 Contribution to Change in Composite Index
 Civ. Employ. 0.1 -0.2 -0.3 -0.7 -0.3
 Ind. Sales -0.0 0.5 0.2 0.7 0.5
 Wg./Salaries 0.2 -0.3 -0.4 0.2 -0.1
 Retail Sales 0.2 0.3 0.9 0.7 0.2
 Trend Adj. -0.169 -0.169 -2.030 -1.015 -0.507
 COMP.INDEX 0.3 0.1 -1.6 -0.2 -0.1
 (B) Based on seasonally adjusted data, three-month moving averages Constant dollar component series adjusted for inflation using national deflators.
 Component series data are preliminary and subject to revision by source agencies.
 (Additional statistical data available upon request)./
 /CONTACT: Jim Dever of Mellon Bank, 215-553-4684/

CO: Mellon Bank ST: Pennsylvania IN: FIN SU: ECO

CD -- PG006 -- 9311 08/04/93 11:03 EDT
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Publication:PR Newswire
Date:Aug 4, 1993

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