Thursday, January 16, 2020

Philly Fed Manufacturing Suggests Activity Increased in January

by Calculated Risk on 1/16/2020 09:19:00 AM

From the Philly Fed: Current Manufacturing Indicators Suggest Growth in January

Manufacturing activity in the region increased this month, according to results from the January Manufacturing Business Outlook Survey. The survey’s indicators for current activity, new orders, shipments, and employment were all positive and increased from their readings in December. The survey’s future activity indexes remained at relatively high readings, suggesting continued optimism about growth for the next six months.

The diffusion index for current general activity increased nearly 15 points this month, from a revised reading of 2.4 in December to 17.0 … Manufacturers continued to report expanding employment this month. The employment index increased 3 points to 19.3.
emphasis added
This was well above the consensus forecast. 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).

These early reports suggest the ISM manufacturing index will likely rebound into positive territory in January.