Philly Fed Manufacturing Index Momentum Eases

Momentum is thankfully easing in the Philly Fed's manufacturing sample which had been reporting among the very strongest growth, and perhaps unsustainably strong, in 50 years of data. At 19.9, the general business conditions index is very healthy but is down 14.5 points in June.

New orders are very strong but at 17.9 are down nearly 23 points from May. Backlogs edged lower for the first time since January as the sample keeps shipments cranked up at a very active 28.7. The sample continues to find hands to do the work with employment up slightly to 30.4 and 3 tenths shy of the all time record set in October last year.

It's hard to assess what the results say for the factory sector as a whole, perhaps that it may be slowing this month but the rise for shipments will mask much of the effect. The nation's factory sector is having a very good year and looks, tariff risks aside, to be a leading contributor to the 2018 economy.