Early in the week, the Empire Manufacturing Index showed that activity in New York was little changed from the prior month. As mentioned in a prior post, the Empire survey tends to be volatile and “sudden shifts have to be taken in context with the overall trend” – see Empire stalls.
The Philly Fed’s Business Activity Index released today showed that manufacturing activity in the mid-Atlantic region accelerated at its fastest pace since April 2005.
The survey released by the Philadelphia Federal Reserve increased from 16.7 in November to 20.4 in December, above the Bloomberg forecast of 16.5 and the fifth-consecutive month the index has been in positive territory. A reading above zero is an indication that manufacturing is expanding in the region.
New orders did slip some but many of the subcomponents suggest continued improvement in the sector heading into 2010.
Meanwhile, the employment index improved nearly 7 points to 6.3, the best reading in over two years and a sign that companies are finally starting to bring new workers onboard.
Prices paid did jump from 14.9 to 33.8, but prices received was nearly unchanged at –1.8. Soft demand is keeping price increases in check.
One note of caution, the six-month forecast fell from 36.8 to 24.4, but that’s still well above zero, suggesting a modest degree of optimism remains.
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