Philadelphia Fed's survey reports business conditions weaker than forecast. Paints a weak recovery

The Philadelphia Fed’s general business conditions index was weaker than forecasts, at -0.7 in September versus -7.7 in August. The details of this report also pointed to contraction in manufacturing in this region in September, albeit at a slower rate than that seen in August.

BOTTOM LINE

According to this survey, manufacturing activity has stalled in the Philadelphia region, although this report paints a weaker picture than some of the other regional surveys (other regional surveys suggest slower growth in August and September rather than contraction). The national ISM survey in August was substantially stronger than most regional surveys. It is difficult to know whether the gap will be closed by the regional indexes picking up or by a slowdown in the national ISM. The next important reading on manufacturing comes with the September Chicago purchasing managers’ survey on September 30th (the day before we get the September ISM manufacturing report).

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