Manufacturing in the Philadelphia region expanded unexpectedly in July, a sign, along with Monday's Empire State Survey, that the factory slowdown in the Northeast may be easing.
The business outlook index from the Philadelphia Fed rose to 19.8 from 12.5 in June. It was the highest reading since March 2011. Economists in the Bloomberg had forecast a score of 8. The Empire State general business conditions index for manufacturing from the New York Fed registered 9.46 for July, well in advance of June's 7.84 result and besting analysts’ expectation of 5.0. It was the best level in five months.
New York Fed
The Philadelphia Federal Reserve District covers eastern Pennsylvania, Delaware and southern New Jersey. The New York Fed region includes New York State, northern New Jersey, southwestern Connecticut, Puerto Rico and the U.S. Virgin Island. Reading in the Fed surveys of more than zero indicates expansion.
Among the Philadelphia survey's components the index for the number of employees rose to 7.70 in July, the highest level since April 2012 from -5.40 in June; the average work week climbed to 6.60 from 0.80; shipments increased to 14.30 from 4.10; new orders declined to 10.20 in July from 16.60 but remained positive.
The New York survey also saw improvement in most categories. New orders rose to 3.77 in July from -6.69; shipments increased to 8.96 from -11.77; the index for the number of employees went up to 3.26 from 0.0 and the workweek rose to -7.61 from -11.29.
More importantly perhaps, the view for most business conditions out six months from the New York Fed improved: general conditions went to 32.01 from 24.98; new orders increased to 31.12 from 19.77; shipments climbed to 34.44 from 20.21; the index for the number of employees fell slightly to 1.09 from 1.61.
Philadelphia region factory managers also became more positive about the outlook six months ahead. The future index rose to 44.9, the best level since March 2011, from 33.7 in June.
Chief Market Strategist