Philly Fed Index Unexpectedly Climbs To Five-Year High In August

(RTTNews) - Philadelphia-area manufacturing activity continued to expand in the month of August, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.

The Philly Fed said its diffusion index for current general activity climbed to 47.4 in August from 41.4 in July, with a positive reading indicating growth. Economists had expected the index to plunge to 25.0.

With the unexpected increase, the Philly Fed index reached its highest level since hitting 48.8 in April 2021.

The advance by the headline index partly reflected a spike by the employment index, which surged to a four-year high of 27.9 in August from 10.0 in July.

Meanwhile, the Philly Fed said the new orders and shipments indexes moved lower during the month but remained elevated.

The new orders index slumped to 30.1 in August from 37.0 in July, while the shipments index tumbled to 27.7 in August from 33.7 in July.

The report also said both price indexes declined to their lowest readings since February but remained above their long-run non-recession averages.

While the prices paid index plummeted to 40.9 in August from 53.9 in July, the prices received index plunged to 17.7 in August from 27.4 in July.

Looking ahead, the Philly Fed said the diffusion index for future general activity soared to 73.6 in August from 34.4 in July, reaching its highest level since August 1983.

A separate report released by the Federal Reserve Bank of New York on Monday said New York manufacturing activity grew strongly in the month of August.

The New York Fed said its general business conditions index climbed to 20.6 in August from 15.6 in July, with a positive reading indicating growth. Economists had expected the index to fall to 11.0.

With the unexpected increase, the New York Fed's general business conditions index reached its highest level since hitting 34.4 in December 2021.

Looking ahead, the New York Fed said firms maintained an optimistic outlook for business activity, with the index for future business conditions rising to 32.1 in August from 27.9 in July.