Philly Feeling Fine

After a better than expected Empire Manufacturing report on Tuesday, today’s release of the Philly Fed Manufacturing report also came in better than expected (34.4 vs 21.0) and was up from last month’s reading of 23.2. What makes this month impressive is that it now represents the 18th straight month that the headline index has come in above 20. That hasn’t happened since – well, ever!Prior to this month’s report, there had never been a streak of more than 17 months since the indicator’s inception where the headline index was above 20.

Looking at the chart below, the current level indicates that further upside momentum may be hard to come by. Outside of the short-period in the early 1980s, the reading on General Business conditions has had a hard time staying above the 35-ish level.

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The table below breaks down this month’s report by each category. As shown, breadth was relatively strong as six categories showed m/m increases, and just three saw declines. Of the gainers, New Orders saw the biggest increase, while the biggest decline came in Prices Paid, which fell from a seven-year high of 56.4 down to a still high level of 52.6.

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As mentioned above, the New Orders component of this month’s report saw the largest increase, rising a staggering 22.2 points to a record 40.6. The last time this component saw a larger monthly increase was in October 2005.

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