Philadelphia Fed manufacturing index falls in August

The Philadelphia Fed manufacturing index dropped in August. The index fell from 26.7 in June to 11.9 in August. This is below consensus expectations of 22. Although this month’s headline figure continues to be at a level in line with expanding manufacturing activity, it now stands well below its most recent high in May. Other activity indicators also appear to point to a slowdown in activity in the regions.

New orders index dropped to 9.9 from 31.4 in July, whereas shipments dropped to 16.6. The employee index dropped to 14.3 and the average workweek fell to 10.7. In the meantime, the latest responses continue to indicate towards upward pressures on inputs prices paid and prices of manufactured outputs received. The index for inventories continued to be in a range consistent with additional stockbuilding, similar to readings so far this year, noted Barclays in a research report.

Measures of forward expectations from the survey continue to indicate towards strong growth in activity in general business conditions in six month continues to be in the strong growth range, down slightly from the highs from a few quarters ago, while the indicator of expected input prices in six months has increased to an elevated range.

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