| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Index | 3.0 | 0.6 to 5.0 | 10.3 | 1.7 |
Highlights
Philly Fed manufacturing topped expectations at 10.3 in October, up from a very modest 1.7 in September. Expectations called for a slight uptick to 3.0.
New orders bounced to 14.2 from minus 1.5 in September, a very good omen for future business activity. As a very early barometer of manufacturing business, somewhat promising! Employment, on the other hand, contracted at minus 2.2 in October versus 10.7 in September.
Six-month expectations also surged, up to 36.7 in October from an already decent 15.8 in September. That suggests something is exciting manufacturers in the Philadelphia district. Is it the 50 bp rate cut from the Fed? It will be interesting to see if other regional Fed manufacturing surveys confirm this result, and then if the biggie, the ISM manufacturing survey, follows suit.
New orders bounced to 14.2 from minus 1.5 in September, a very good omen for future business activity. As a very early barometer of manufacturing business, somewhat promising! Employment, on the other hand, contracted at minus 2.2 in October versus 10.7 in September.
Six-month expectations also surged, up to 36.7 in October from an already decent 15.8 in September. That suggests something is exciting manufacturers in the Philadelphia district. Is it the 50 bp rate cut from the Fed? It will be interesting to see if other regional Fed manufacturing surveys confirm this result, and then if the biggie, the ISM manufacturing survey, follows suit.
Market Consensus Before Announcement
Philly Fed is expected to eke out another positive showing at 3.0 in October after September's marginally positive 1.7.
Definition
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.
Description
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.
