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Manufacturing in US Northeast dodges Delta impact in September, Philly Fed says

By Alexander Bueso

Date: Monday 01 Nov 2021

LONDON (ShareCast) - (Sharecast News) - Manufacturing conditions in the US mid-Atlantic region exceeded forecasts by a wide margin in September, the results of a closely-followed survey revealed.
The Federal Reserve Bank of Philadelphia's factory sector index jumped from a reading of 19.4 in August to 30.7 for September.

Economists had penciled-in a reading of 19.2.

Significantly, the sub-index linked to firms' delivery times eased from 26.3 to 20.4.

The key sub-index tracking new orders did so as well, from 22.8 to 15.9.

Price pressures on the other hand remained elevated, with the corresponding sub-index only dipping from 71.2 to 67.3.

Another sub-index for prices received meanwhile drifted lower, from 53.9 to 52.9.

Staffing levels were little changed, with that sub-index slipping from 32.6 to 26.3 and that linked to the average length of companies' workweek rising from 24.5 to 29.3.

Commenting on Thursday's data, Ian Shepherdson, chief economist at Pantheon Macroeconomics said: "The jump in the Philly Fed index is a surprise; it tends to track China's Caixin manufacturing PMI with a lag of about one month, and that pointed to a clear drop.

"Alongside the big jump in the Empire State index, this suggests that manufacturing in the Northeast, at least, is outperforming. This might not last, but for now the numbers are encouraging."

Worth noting, the US Northeast was one of the least affected regions of the country by the pandemic due to the relatively higher vaccination rates there.