Philly Fed & Empire: Manufacturing Contraction

Bottom Line: The Philadelphia Fed's and the New York Fed's surveys of manufacturing activity showed a contraction in September. While The Empire survey was better than expected, Philly disappointed expectations. While new orders rose slightly in the Empire survey, both surveys showed a contraction in orders over the last three months. Price pressures, meanwhile, have eased very slowly and remain historically elevated. Overall, the manufacturing sector held up better than expected as most businesses worked off order backlogs through the summer, but now activity is slowing after several months of slower order growth. This morning's Industrial Production report for August also confirmed this trend with still positive but decelerating activity.

The Philadelphia Fed Manufacturing Index FELL -16.1 points to -9.9, BELOW the 3-Month average of -5.33, BELOW the 6-Month average of 0.15 and -40.6 BELOW the year-ago level.  On an ISM-weighted basis the index FELL -14 points to -3.9, BELOW the 3-Month average of 1.3, BELOW the 6-Month average of 9.27 and -26.4 BELOW the year-ago level.

Empire Survey General Business Conditions ROSE 29.8 points to -1.5, ABOVE the 3-Month average of -7.23, ABOVE the 6-Month average of -1.65 but 35.8 BELOW the year-ago level.  ISM-Weighted ROSE 22.09 points to 9.18, ABOVE the 3-Month average of 3.61, ABOVE the 6-Month average of 7.25 but 18.37 BELOW the year-ago level.