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Philly Fed Index Unexpectedly Climbs To 26.2 In December

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After reporting a bigger than expected slowdown in the pace of growth in regional manufacturing activity in the previous month, the Federal Reserve Bank of Philadelphia released a report on Thursday showing the pace of growth unexpectedly rebounded in the month of December.

The Philly Fed said its diffusion index for current general activity climbed to 26.2 in December from 22.7 in November, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to drop to 21.5.

The unexpected rebound by the headline index was partly due to a notable acceleration in the pace of new orders growth, as the new orders index jumped to 29.8 in December from 21.4 in November.

The shipments index also rose to 23.4 in December from 21.7 in November, indicating a modestly faster rate of growth in shipments.

While the number of employees index dropped to 18.1 in December from 22.6 in November, a positive reading still indicates job growth.

The report showed a mixed picture on the inflation front, as the prices paid index tumbled to 25.4 in December from 39.0 in November but the prices received index rose to 11.3 from 8.6.

Looking ahead, the Philly Fed said most indicators reflecting expectations for the next six months suggest continued optimism.

The diffusion index for future general activity climbed to 53.5 in December from 50.1 in November, while the indexes for future new orders and shipments also improved.

Last Friday, the New York Federal Reserve released a separate report showing growth in New York manufacturing activity slowed by more than anticipated in the month of December.

The New York Fed said its general business conditions index dropped to 18.0 in December from 19.4 in November. The index had been expected to dip to 18.6.

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