Philly Fed: Surprise Rebound, 1st Positive in A Year

Bottom Line: The Philadelphia Fed's Manufacturing survey was sharply higher than expected, rising to levels suggesting expansion for the first time in a year. New orders led the gains as shipments rose for the second time in three months. Nearly 25% of firms surveyed said activity increased in early August, nearly double the number last month. Inventories fell sharply, suggesting further production growth ahead. Employment fell slightly, with most manufacturing indicators suggesting employment was still high relative to activity levels after businesses hoarded labor during the pandemic boom in goods demand. Overall, this was a favorable report. But the recovery in manufacturing still looks volatile, with other indicators like the New York Fed survey suggesting a contraction in early August.The Philadelphia Fed Manufacturing Index ROSE 25.5 points to 12, ABOVE the 3-Month average of -5.07, ABOVE the 6-Month average of -13.35, and 5.7 ABOVE the year-ago level.  On an ISM-weighted basis, the index ROSE 13.1 points  to 3, ABOVE the 3-Month average of -3.6, ABOVE the 6-Month average of -8.82 but -6.9 BELOW the year-ago level.