Philly Fed Business Survey Surges

Accelerating pressure on nearly everything but prices headliines a very strong Philly Fed report for September where the general business conditions index surged 11.0 points to a 22.9 level that tops Econoday's forecast range. New orders highlight the data, jumping 11.5 points to 21.4 with unfilled orders rising 7.0 points to 12.6. Shipments rose by 3.0 points to 19.6 with employment up 3.3 points to 17.6.

The sample's available capacity may be getting tested as delivery times rose 4.7 points to 11.1 as the workweek climbed 3.9 points to 14.6. Inventories contracted in the month, down a very steep 18.9 points to minus 3.5 in a draw that, judging by the strength of orders and shipments, is unwanted and may reflect the delays in deliveries and also production limitations.

Yet despite capacity issues, prices are actually moderating this month with input prices down 15.4 points to a still elevated 39.6 and with selling prices down 13.6 points to 19.6.

The price data suggest that capacity and tariff issues are not, at least right now, creating significant dislocations. Six-month price data also moderated in the month. Today's report is unusually favorable, belying the Federal Reserve's assessment that growth in the nation's manufacturing sector is no more than moderate.