Manufacturing growth in the Philadelphia-area continued in January, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday, with the index of regional manufacturing activity rising by more than expected.
The Philly Fed said its diffusion index of current activity rose to 9.4 in January from a revised 6.4 in December, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to climb to 8.7.
While the index rose more than expected, Amna Asaf, an economist at Capital Economics, said the details of the survey suggest that manufacturing activity is a little bit softer than indicated by the headline index.
The Philly Fed noted that the shipments and new orders indexes remained positive but moved in opposite directions compared to the previous month.
The shipments index edged up to 12.1 in January from 11.9 in December, while the new orders index fell to 5.1 from 12.9.
The report also showed mixed readings on employment. While the number of employees index climbed to 10.0 in January from 4.4 in December, the average employee workweek index dropped to a negative 5.3 from a positive 4.8.
Additionally, the prices paid index rose to 18.7 from 16.4 in the previous month, while the prices received index dropped to 5.1 from 10.8.
The Philly Fed said the survey's future indicators have recently shown moderating optimism about growth in manufacturing.
The future general activity index tumbled to 34.4 in January from 44.8 in December, although nearly 48 percent of firms still expect increases in activity over the next six months.
"Bottom line, this data points to 'moderate' growth, the term used by both the Philly Fed and reflected in yesterday's Beige Book," said Peter Boockvar, managing director at the Lindsey Group. "We still don't see an acceleration in GDP to north of 3% that some forecast."
A separate report released by the New York Federal Reserve on Wednesday showed that business activity for New York manufacturers expanded at a much faster pace in the month of January.
The New York Fed said its general business conditions index jumped to 12.5 in January from 2.2 in December. Economists had expected the index to climb to 3.5.
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