Philly Fed: Volatile Bottoming Still Base Case

Bottom Line: The Philadelphia Fed's Manufacturing survey fell again, disappointing expectations after a surprise rebound last month. The bottoming process in the goods economy remains volatile. Nonetheless, there are signs of a slow turn in manufacturing after several quarters of contraction. Moreover, the tailwind of capital investment in manufacturing as companies "re-shore" production has blunted the impact of this cyclical downturn. Overall, this survey suggested the bottoming process in cyclical manufacturing remained volatile in early September.