Philly Fed July Index Surges to 41.4, Crushing 13.0 Forecast
Philadelphia Fed's July manufacturing index blew past expectations, jumping to 41.4 from 10.3 in June as new orders and shipments accelerated sharply.
The Federal Reserve Bank of Philadelphia's July business conditions index rocketed to +41.4 Thursday, more than tripling analyst expectations of +13.0 and dwarfing June's already-positive reading of +10.3 — a blowout result that signals a dramatic acceleration in mid-Atlantic manufacturing activity.
The internal components were nearly all pointed upward. New orders surged to 37.0 from 27.3 the prior month, while shipments more than doubled to 33.7 from 14.9. Unfilled orders climbed to 18.1 from 10.5, and the average employee workweek swung decisively positive to 14.0 after collapsing to -6.5 in June — a sign factories are ramping up hours across the board.
Read more China New Home Prices Fall for Fourth Straight Year in June →
Price pressures remained firmly elevated and intensified on the revenue side. The prices-paid index edged up to 53.9 from 53.2, while prices received jumped to 27.4 from 20.3, suggesting manufacturers are gaining more pricing power and passing higher input costs on to customers. Employment ticked higher as well, reaching 10.0 versus 7.9 last month, pointing to modest but sustained hiring.
The six-month forward-looking indicators told a more cautious story. The future general activity index dropped to 34.4 from 53.2 in June, and the capital expenditure outlook fell to 30.1 from 41.2. Forward new orders declined sharply to 35.1 from 60.8, hinting that while current conditions are booming, manufacturers temper their enthusiasm about the pace sustaining through year-end.
Continue reading at Forexlive.
