FX.co ★ Philly Fed Index Indicates Return To Growth In September

The latest report from the Federal Reserve Bank of Philadelphia reveals that manufacturing activity in the Philadelphia area entered positive territory in September. According to the report released on Thursday, the diffusion index for current general activity rose to 1.7 from -7.0 in August, signifying growth. Economists had anticipated an index increase to 2.0.

Despite this uplift, the Philly Fed characterized the regional manufacturing activity as "mixed overall," citing declines in the indexes for new orders and shipments, both of which turned negative. Specifically, the new orders index fell to -1.5 from 14.6 in August, and the shipments index dropped sharply to -14.3 from 14.6 in the prior month.

Conversely, the number of employees index showed a marked improvement, rising to 10.7 from -5.7, indicating a positive shift in employment. Moreover, the prices paid index increased to 34.0 from 24.0, while the prices received index rose to 24.6 from 13.7.

Looking forward, firms remain optimistic about growth over the next six months, with the diffusion index for future general activity slightly increasing to 15.8 from 15.4.

In a related report from the Federal Reserve Bank of New York released on Monday, regional manufacturing exhibited growth for the first time in nearly a year. The general business conditions index surged to 11.5 from -4.7 in August, defying economists' expectations of a slight rise to -3.9. This marks the index’s return to positive readings since last November when it stood at 9.1.

The New York Fed report also highlighted increased optimism for future conditions, as the index for future business activity climbed to 30.6 from 22.9.

Both reports underline a notable shift in manufacturing sentiments, with evidence of growth and optimism for the months ahead.