Philly Fed Index Skyrockets To Highest Level Since April 2021

(RTTNews) - The Federal Reserve Bank of Philadelphia released a report on Thursday showing a substantial turnaround by regional manufacturing activity in the month of January.

The Philly Fed said its diffusion index for current general activity skyrocketed to a positive 44.3 in January from a negative 10.9 in December, with a positive reading indicating growth. Economists had expected the index to jump to a negative 5.0.

With the significantly bigger than expected increase, the Philly Fed index surged its highest level since hitting 44.4 in April 2021.

The spike by the headline index partly reflected a substantial turnaround by new orders, as the new orders index soared to a positive 42.9 in January from a negative 3.6 in December, reaching its highest level since November 2021.

The shipments index also skyrocketed to 41.0 in January from 1.7 in December, reaching its highest reading since October 2020. The employment index also climbed to 11.9 in January from 4.8 in December.

The report also said the prices paid index rose to 31.9 in January from 26.6 in December, while the prices received index jumped to 29.7 in January from 5.6 in December.

Looking ahead, the Philly Fed said the diffusion index for future general activity jumped to 46.3 in January from 33.8 in December, suggesting more widespread expectations for overall growth over the next six months.

The Federal Reserve Bank of New York released a separate on Wednesday showing regional manufacturing activity unexpectedly declined in the month of January.

The New York Fed said its general business conditions index slumped to a negative 12.6 in January from a positive 2.1 in December, with a negative reading indicating contraction. Economists had expected the index to inch up to a positive 3.0.

Meanwhile, the New York Fed said firms grew more optimistic conditions would improve in the months ahead, with the index for future business activity jumping to 36.7 in January from 26.9 in December.