Philly Fed Sample Shows Acceleration

However much the factory sector may have slowed late last year, Philly's sample is reporting clear acceleration so far in the New Year. The general conditions index, at 17.0 for a nearly 8 point gain, easily beat expectations with details showing a surge in new orders to 21.3 with unfilled orders continuing to rise at 5.4. Shipments are steady at 11.4 with delivery times slowing sharply in an indication of renewed capacity stress. Employment did slow but remains solid at 9.6 while general 6-month optimism edged further higher for a second month in a row to a very favorable 31.2.

Today's results contrast with Tuesday's Empire State report where the headline index fell to 3.9 for the lowest reading in nearly two years. And given that Philly's sample often reports greater strength than other regional reports, the verdict on the factory sector is still uncertain. Tomorrow's much more definitive data on December's industrial production may help clear up the picture for a factory sector that roared through most of 2018 before apparently slowing at year end.