Thursday, January 19, 2017

Philly Fed: Manufacturing Activity Continued to Improve in January

by Bill McBride on 1/19/2017 10:43:00 AM

Earlier from the Philly Fed: Manufacturing Activity Continued to Improve in January

Economic conditions continued to improve in January, according to the firms responding to this month’s Manufacturing Business Outlook Survey. The indexes for general activity, new orders, and employment were all positive this month and increased from their readings last month. Manufacturers have generally grown more optimistic in their forecasts over the past two months. The future indexes for growth over the next six months, including employment, continued to improve this month.
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The index for current manufacturing activity in the region increased from a revised reading of 19.7 in December to 23.6 this month. ... The general activity index has remained positive for six consecutive months, and the activity index reading was the highest since November 2014.
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Firms reported an increase in manufacturing employment this month. ... The current employment index improved 9 points, registering its second consecutive positive reading.
Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Fed Manufacturing Surveys and ISM PMI Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (yellow, through January), and five Fed surveys are averaged (blue, through December) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through December (right axis).

It seems likely the ISM manufacturing index will show faster expansion again in January.