Manufacturing in the mid-Atlantic region gained momentum for the fourth month in a row as new orders and employment improved and prices reached an almost three year high.
The Philadelphia Federal Reserve Business Outlook Index rose to 17.8 in June from 15.4 in May, belying the forecast for it to fall to 14.0 from the Bloomberg poll of economists. It was the best reading for this survey since last September.
The level of new orders jumped to 16.80 from 10.50 in May and the number of employees climbed to 11.90 in June from 7.80, both scores were the highest in eight months.
Prices paid by firms in the Philadelphia region as measured by index, soared to 35.00, the highest level in almost three years, from 23.00 the prior month. It was the largest one month gain since last June and mirrors the recent jump in the consumer price index.
The Philadelphia Federal Reserve is the second of five Fed districts that issue monthly summaries on manufacturing activity in their areas. The Philadelphia district covers the eastern two-thirds of Pennsylvania, the southern half of New Jersey and Delaware.
On Monday the New York Fed had reported a better than forecast result in its Empire Manufacturing Survey for June. At 19.28, it was the best index level in four years. New orders were also at a four year high though the number of employees fell by fell by more than half. Prices paid fell slightly and were the lowest in six months.
The Richmond Fed will report on Tuesday June 24th, the Kansas City Fed on Thursday June 26th and the Dallas Fed on Monday June 30th. In May all had reported a mixed record for the year.
On Monday the 23rd the Chicago Fed will issue its National Activity Index for May. This index gauges overall economic activity nationwide with a weighted average of 85 indicators in four categories: production and income; employment, unemployment and hours; personal consumption and housing; and sales, orders and inventories. A zero value means the economy is expanding at its historical average; negative values are below trend, positive values above.
The index was at -0.32 in April and has averaged -0.07 since the end of the recession in June 2009. Over the history of this index which goes back to March 1967 the average has been 0.02.
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