The Philadelphia Fed manufacturing index rose to 1.9 in November, returning to positive territory after two consecutive negative readings. Forecast (-2.0) and the consensus (-0.5) had looked for a modest negative reading on the month. New orders (-3.7, previous: 10.6) and shipments (-2.5, previous: -6.1) contracted in November, but less so than last month. The employment index rose to 2.6 (previous: -1.7), in contrast with the negative reading for this component from the Empire State survey (-7.3).
The average workweek shrank sharply, to -16.2 (previous: -7.3), the weakest reading since June 2012. The headline Philadelphia Fed index comes from a separation survey question on general business conditions. The ISM-adjusted version of the index, which averages five of the component indices, remained in negative territory (48.1, previous: 44.9), despite the rebound in employment.
"Along with the comparable version of the Empire State index, November readings on Northeast manufacturing activity suggest a moderation in the pace of decline. The ISM manufacturing index will provide an indication of whether this is the case across the country", says Barclays.
