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Philly Fed Survey: Declines Again But Still At High Levels

April 20, 2017

Bottom Line: The Philadelphia Fed's survey of mid-Atlantic manufacturers fell again in April after hitting all-time highs in February. 37% of survey respondents indicated growth in activity in April, while only 15% reported declines. This compared with 44% and 11%, respectively, last month. Still, the index has been positive for 9 months and remains at high levels. Employment remains strong with 27% of firms reporting an increase in employment. With this and the New York Fed Survey available, the outlook for the national ISM suggests a modest decline is likely.

The Philadelphia Fed Index FELL by 10.8 points in April to 22.0%, compared with market expectations for 25.5%. This indicates that manufacturing activity in the mid-Atlantic region still expanded in the last month. On an ISM-weighted basis, the index FELL less than the headline, indicating that the details were somewhat mixed compared to the headline figure.
New Orders fell to 27.4%. Shipments fell to 23.4%. Unfilled Orders slowed moderately while Inventories climbed.

Employment increased sharply by 19.9%. This portends better factory job creation in the upcoming April payroll employment report.

Prices Paid decelerated sharply.

The 6-Month Outlook deteriorated.

Article by Contingent Macro Advisors