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Philly Fed Survey: Modest Decline, New Orders Rise, Inventories Fall Sharply

November 16, 2017
Bottom Line: While the headline index for the survey of Manufacturing activity of mid-Atlantic based businesses missed expectations for the first time in 4 months, the underlying components suggest continued strength. New orders rose and inventories fell as 6-month outlooks also improved. Overall, this first of several regional surveys suggests continued strength in manufacturing activity and the potential for the national survey to remain near recent highs, if slightly lower than last month.

The Philadelphia Fed Index FELL by 5.2 points in November to 22.7%, compared with market expectations for 24.6%.

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 expanded and accelerated sharply.
  • Shipments expanded but growth decelerated sharply.
  • Unfilled Orders accelerated sharply while Inventories dropped.
  • Employment increased sharply. This portends better factory job creation in the upcoming November payroll employment report.
  • Prices Paid accelerated slightly.
  • The 6-Month Outlook improved.