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US: Philadelphia Fed Manufacturing Index
| Consensus | Consensus Range | Actual | Previous | |
| Index | 10.0 | 5.0 to 12.0 | 10.3 | -0.4 |
Highlights
The Philly Fed index comes in right on expectations at 10.3 in June versus the expected 10.0, and up nicely into modest growth territory from minus 0.4 in May.
New orders surge into expansion at 27.3 in June from minus 1.7 in May, suggesting more growth ahead. Employment returns to expansion at 7.9 from minus 2.8, reaching its best level since January. The increase in hiring looks like a modest vote of confidence from manufacturers. The six-month outlook index remains upbeat at 50.2 in June versus 53.2 in May.
Price pressures remain a problem with prices paid at 53.2 versus 47.9 in May. Input price pressures expected to decline in months ahead assuming energy prices decline with some reopening of the Strait of Hormuz. Prices received are at 20.3 in June versus 26.3 in May.
Market Consensus Before Announcement
The consensus sees better growth with the index at 10.0 in June, up from minus 0.4 in May.
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.