Philly Fed Index Indicates Continued Growth In Manufacturing Sector

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Manufacturing activity in the mid-Atlantic region has continued to expand in the month of September, according to a report released by the Philadelphia Federal Reserve on Thursday, with the index of activity in the manufacturing sector rising by more than expected.

The Philly Fed said its index of manufacturing activity rose to 14.1 in September from 4.2 in August, with a positive reading indicating growth in the sector. Economists had been expecting a more modest increase by the index to a reading of 8.0.

With the increase, the index rose to its highest level since June of 2007, indicating the second consecutive month of growth in the manufacturing sector.

A notable acceleration in the pace of shipment growth contributed to the continued improvement in the sector, with the shipments index jumping to 8.2 in September from 0.6 in August.

At the same time, the report showed a slowdown in the pace of new orders growth, as the new orders index slipped to 3.3 in September from 4.2 in the previous month.

Inventories also saw a notable downturn after seeing modest growth in the previous month, with the inventories index falling to a negative 18.1 in September from 0.3 in August.

The report also showed continued weakness in labor market conditions, as the number of employees index edged down to a negative 14.3 in September from a negative 12.9 in August.

On the inflation front, the prices paid index rose to 14.9 in September from 10.0 in August, while the prices received index fell to a negative 10.6 from a negative 1.5 in the previous month.

Looking ahead, the Philly Fed noted some deterioration in the outlook for the next six months, although firms still expect conditions to improve. The future general activity index remained positive for the ninth consecutive month but decreased to 47.8 in September from 56.8 in August.

Earlier this week, a report from the New York Federal Reserve showed that conditions for New York manufacturers continued to improve in September, with the index of activity in the sector moving more firmly into positive territory.

The New York Fed said the general business conditions index rose to 18.9 in September from 12.1 in August, with a positive reading indicating growth in the manufacturing sector. Economists had been expecting the index to edge up to a reading of 15.0.

With the increase, the index rose to its highest level since November of 2007, indicating the second consecutive month of expansion following fifteen consecutive months of contraction.

Manufacturing activity in the mid-Atlantic region has continued to expand in the month of September, according to a report released by the Philadelphia Federal Reserve on Thursday, with the index of activity in the manufacturing sector rising by more than expected. The Philly Fed said its index of manufacturing activity rose to 14.1 in September from 4.2 in August, with a positive reading indicating growth in the sector. Economists had been expecting a more modest increase by the index. (Market News Provided by RTTNews)