ECON: Philly Fed Index Stronger Than Expected
- Business conditions 19.8 vs 15.0 forecast, 22.3 previous
- 6-mo outlook 60.8 vs 58.2 previous
- New Orders 27.5 vs 21.2 previous
- Employment Index 15.4 vs 10.3 previous
-Market Reaction: Not much so far. Slight move weaker right at 10am, but recovered and back to pre-data levels now.
Manufacturing growth in the region continued in October, according to firms responding to this month’s Business Outlook Survey. The survey’s broadest indicators for general activity, new orders, shipments, and employment were positive, signifying growth. The survey's indicators of future activity suggest continued optimism about growth over the next six months.
Indicators Suggest Continuing Expansion
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, edged down from 22.3 in September to 19.8 this month (see Chart). The index has now been positive for five consecutive months. The percentage of firms reporting increased activity this month (36 percent) was greater than the percentage reporting decreased activity (16 percent).
The demand for manufactured goods, as measured by the current new orders index, increased 6 points, to 27.5, its highest reading since March 2011. Shipments continued to expand: The index fell 1 point to 20.4, following a 22 point increase last month. The diffusion indexes for inventories, delivery times, and unfilled orders were all positive and higher than last month.
Labor market indicators showed improvement this month. The current employment index increased 5 points, to 15.4, its highest reading since May 2011. The percentage of firms reporting increases in employment (23 percent) exceeded the percentage reporting decreases (8 percent).