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The numbers: The Philadelphia Fed said Thursday its gauge of business activity in its region dipped in September. The regional Fed bank’s index fell to 15 from 17.2 in August. Any reading above zero indicates improving conditions. This is the fourth straight positive reading. Economists polled by MarketWatch expected a 13 reading.
What happened: The headline index is based on a single stand alone question about business conditions unlike the national ISM manufacturing index which is a composite based on underlying data.
The components of the Philly Fed index were stronger than the headline. The barometer on new orders rose to 25.5 in September from 19 in the prior month. The shipments index surged to 36.6 in September from 9.4. Inventories moved deeper into negative territory.The measure of the six-month business outlook rose 18 points to 56.6.
Big picture: Economists see manufacturing continuing to expand but are divided about what the pace of growth will be going forward. Some see the sector losing momentum, while others see strong activity becoming entrenched. Last week, a similar survey conducted by the New York Fed showed manufacturing jumped with sentiment rising to 17 in September from 3.7 in August. The regional data is useful for economists trying to gauge the health of the factory sector. Last month, the manufacturing ISM index rose to 56, nearly a two-year high, from 54.2 in the prior month.
Market reaction: Stock futures were pointing to losses on Thursday after the Fed projected no interest rate hikes for at least the next three years. The Dow Jones Industrial Average DJIA, +0.13% was set to fall sharply on Thursday.
