Philly Fed: Second Month of Declines

Bottom Line: The Philadelphia Fed's index of manufacturing activity fell for the second month in a row in October, as new orders declined for the fifth month. Shipments still rose slightly as manufacturers worked off backlogs. However, the report continued to suggest weakness going forward as new orders fell and order backlogs declined. Managers' expectations for future activity fell, with future unfilled orders dropping sharply again. Overall, the Philly Fed survey confirms trends we've been seeing across the country for several months. While current production has decelerated but is holding up as manufacturers work off backlogs, most indications suggest a sharp slowdown is coming.The Philadelphia Fed Manufacturing Index was nearly unchanged,  1.2 points to -8.7, BELOW the 3-Month average of -4.13, BELOW the 6-Month average of -4.23 and -32.5 BELOW the year-ago level.  On an ISM-weighted basis, the index ROSE 4.9 points to 1, BELOW the 3-Month average of 2.4, BELOW the 6-Month average of 5.72 and -28.6 BELOW the year-ago level.