Philadelphia Fed Index Jumped Unexpectedly in June
The Philadelphia Fed’s general activity index jumped 20.4 points to -2.2 in June, much better than expected. The new orders and shipments indices also jumped, suggesting a possible rise in the June ISM Manufacturing index. The pace of decline in the region’s manufacturing sector seems to have lessened dramatically.
Orders Spiked, Shipments Above Zero
The new orders index spiked to -4.8, while the shipments index jumped to 2.1. While these forward looking indices suggest better underlying demand, the new orders index is still in contracting territory.
Taking some luster off the report, the average workweek actually declined slightly to -26.6, which signals that production is still weak.
Future Indices Continued to Improve
The six months from now headline index continued to improve, increasing 12.6 points to 60.1. The capital expenditure index was positive for the first time in eight months, increasing to 1.7.
While this report shows great improvement for the manufacturing sector, it merely points to a lessening of the pace of decline. If this improvement is sustained, it will be another good sign of recovery for the economy.
Wachovia Corporation
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