Philadelphia Fed Survey: Factory Activity Increases Modestly

June 16, 2016
Bottom Line: Manufacturing activity of mid-Atlantic based businesses expanded modestly. While the headline number was better than expectations the underlying components were much weaker than yesterday’s Empire State Manufacturing Survey, -5.8% vs. 3.8% on a ISM weighted basis, it suggests that the early outlook for the national ISM Manufacturing Survey, to be reported on July 1, is mixed. The Philadelphia Fed Index ROSE by 6.5 points in June to 4.7%, compared with market expectations for a smaller increase to 1.0%. This indicates that manufacturing activity in the mid-Atlantic region expanded modestly. Meanwhile, on an ISM-weighted basis, the index deteriorated modestly, indicating that the details were weaker than the headline figure. New Orders decreased modestly by 3.0%, their 2nd consecutive decline. Shipments decreased by 2.1%, their 3rd consecutive decline. Unfilled Orders fell sharply while Inventories dropped, their 12th consecutive decline Employment decreased sharply by 10.9% for 6th straight month. This portends weaker factory job creation in the upcoming June payroll employment report. Prices Paid accelerated moderately. The 6-Month Outlook deteriorated modestly.
Article by contingentmacro