Philly Fed Manufacturing Report Sends Mixed Messages

Manufacturing is growing in the Philadelphia area, according to a January Philadelphia Federal Reserve Bank report (link opens as PDF) released today. 

The Philly Fed publishes the results of a monthly survey asking regional (eastern Pennsylvania, southern New Jersey, and Delaware) manufacturing stakeholders whether certain components of manufacturing have experienced growth (positive number), or contraction (negative number). Investors watch regional manufacturing reports as a possible signal of larger economic upswings or downturns.

After clocking in at a revised 6.4 for December, analysts underestimated January's growth. This latest report came in at 9.4, 0.7 points above expectations.  

Source: Philadelphia Federal Reserve. 

Dissecting the index into components, January's report sends some mixed messages. While top-line numbers show faster manufacturing growth, new orders took a significant 7.8-point dip to 5.1. However, major inventory draws, consistently strong shipments, and a 5.6-point gain in employment to an even 10 all point to high confidence for well-functioning business. 

The Philly Fed report today comes on the heels of a surprisingly strong manufacturing report from its neighbor, the New York Federal Reserve.


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