The Philadelphia Fed's manufacturing index is up more than a dozen points to a higher-than-expected 13.9 in data for July. This is the sixth straight score in the positive column and the highest of the streak next only to April's 15.5.

Judging by a more than 20-point jump in new orders to 20.7, August's headline may well again hold in positive ground. This is the best reading for new orders since March 2022. Unfilled orders also rose, climbing a couple of tenths to 9.1 which is the highest for this reading since May 2022. Employment follows suit, jumping nearly 18 points to 15.2 for the best since October 2022.

Inventories are being drawn down this month, delivery times are increasing, and selling prices are rising sharply, the latter up more than 10 points to 24.2 which is the highest reading since January last year. Input costs, however, are easing this month, down nearly 3 points to 19.8.

Lower costs, higher selling prices and rising orders are certain to make respondents happy, evident in the 6-month outlook which jolted nearly 25 points higher to 38.7 to nudge out March's 38.6 for its best score since June 2021.

This report had been badly depressed through much of last year making the current run, topped off by July's results, a positive indication for needed improvement in the US manufacturing sector. These results will have forecasters lifting their estimates for the ISM manufacturing index which has been mostly stuck in contraction since late 2022.

The Philadelphia Fed manufacturing index in July is expected to edge higher to 3.0 versus June's 1.3 which, for a fifth report in a row, managed to hold in the plus column.

The general conditions index from this business outlook survey is a diffusion index of manufacturing conditions within the Philadelphia Federal Reserve district. This survey, widely followed as an indicator of manufacturing sector trends, is correlated with the ISM manufacturing index and the index of industrial production.

Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. By tracking economic data such as the Philly Fed survey, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more moderate growth so that it won't lead to inflation. The Philly Fed survey gives a detailed look at the manufacturing sector, how busy it is and where things are headed. Since manufacturing is a major sector of the economy, this report has a big influence on market behavior. Some of the Philly Fed sub-indexes also provide insight on commodity prices and other clues on inflation. The bond market is highly sensitive to this report because it is released early in the month and is available before other important indicators.