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US: Philadelphia Fed Manufacturing Index
| Consensus | Consensus Range | Actual | Previous | |
| Index | 14.0 | 5.0 to 15.0 | 41.4 | 10.3 |
Highlights
The Philly Fed manufacturing report blows away all expectations with a huge 41.4 current index reading in July, up from 10.3 in June, and way above the 14.0 figure anticipated in the Econoday survey. This is the strongest growth since November 2021.
New orders is up to a tremendous 37.0 in July from 27.3 in June, again its highest since November 2021. Employment ticks up 2 points to 10.0, its highest since December. Shipments is up to 33.7 in July from 14.9 in June.
Inflation pressures remain in evidence with the prices paid index up to 53.9 from 53.2 and prices received at 27.4 versus 20.3.
The 6-month outlook index slips to 34.4 from 50.2 but it remains elevated. Quite a remarkable report.
Hard to say why growth picked up so much in early July from June but it seems likely the retreat in energy prices through June had a lot to do with it, and the rebound in energy prices now under way is likely to undercut the progress.
Market Consensus Before Announcement
The index is seen higher at 14.0 in July versus 10.3 in June.
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.