US economy

Manufacturing activity improved in January — Philadelphia Fed survey


Manufacturing activity on the east coast of the US picked up at the start of 2020, with an index tracking the sector rising to its highest level in eight months and stirring hopes for one of the highest-profile laggards in the domestic economy.

The Federal Reserve Bank of Philadelphia’s business index jumped to 17 in January, blowing past an upwardly revised 2.4 in December and the median forecast for 3.8 in a Refinitiv survey of economists.

The Philly Fed’s survey, released on Thursday, provided some encouragement for the broader manufacturing sector, which has been contracting nationally since the summer and saw activity hit its lowest in more than a decade in December.

The survey’s sub-indices tracking employment, capital expenditure and new orders all improved from December’s readings, while the sub-index for expected activity six months from now hit an 18-month high.

The encouraging survey, and a modest rise in retail sales during December, helped the US dollar index erase session lows of about a 0.2 per cent drop shortly before the release of the data and trade flat for the day at 97.224.

The Philly Fed’s survey comes a day after a similar set of data from the New York Fed, which saw its Empire State manufacturing index rise more than forecast in January to an albeit modest 4.8 from 3.5 at the end of 2019.

The Empire index is regarded as a precursor to the Philly Fed’s survey, which in turn is seen as a leading indicator of the national-level manufacturing index from the Institute for Supply Management, Joshua Shapiro, chief US economist at MFR, points out.

The ISM manufacturing index was 47.2 in December, keeping it below the threshold of 50 that separates expansion from contraction. It was the lowest reading since June 2009.



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.