Philadelphia Fed Survey: 6th Consecutive Decline

Bottom Line: Manufacturing activity of mid-Atlantic based businesses shrank for the 6th consecutive month. While less weak than Tuesday’s Empire State Manufacturing Survey, -6.1% vs. -15.8% on a ISM weighted basis, it suggests that the early outlook for the national ISM Manufacturing Survey, to be reported on March 1, still has a negative bias. The Philadelphia Fed Index ROSE by 0.7 points in February to -2.8%, compared with market expectations for a large decline to -3.0%. This indicates that manufacturing activity in the mid-Atlantic region contracted modestly. On an ISM-weighted basis, the index deteriorated moderately, indicating that the details were more negative than the headline figure. New Orders decreased moderately by 5.3%, their 5th consecutive decline. Shipments increased by 2.5%, their 2nd consecutive advance. Unfilled Orders fell sharply while Inventories dropped, their 8th consecutive decline. Employment decreased moderately by 5.0% for second straight month. This portends weaker factory job creation in the upcoming February payroll employment report. Prices Paid declined modestly. The 6-Month Outlook deteriorated as business executives were more optimistic about the factory sector's prospects.