Philly Fed: Another Sharp Decline

Bottom Line: The Philadelphia Fed's index of manufacturing activity fell sharply in February after rebounding in January. The details were not quite as negative as the headline, as the ISM-weighted index was only slightly negative with modest new order declines. Nonetheless, the spike in inventories was concerning, and the trends remained on the downside. Employment was still positive but was trending lower. Overall, the second of the regional manufacturing surveys painted a picture of continued contraction in manufacturing, much as the New York Fed survey showed earlier.

The Philadelphia Fed Manufacturing Index FELL -15.4 points to -24.3, BELOW the 3-Month average of -15.63, BELOW the 6-Month average of -12.8, and -37 BELOW the year-ago level.  On an ISM-weighted basis, the index FELL -2.3 points to -1.4, ABOVE the 3-Month average of -3, ABOVE the 6-Month average of -1.98 but -19.2 BELOW the year-ago level.