With the headline index falling to a 21-month low in August, last month’s Philly Fed was a bit of a disappointment.  However, with an overall strong reading in the ISM in early September, the weak reading in Philly was considered more of a one-off anomaly than anything else.  With this month’s report for September, that reasoning was confirmed as the index saw a nice rebound, rising from 11.9 up to 22.9.  Now, the question is which region is right?  Philly with its strong report in September, or the New York report, which was weak.

Looking through the various sub-indices of the report, New Orders saw a sharp rebound, followed by Unfilled Orders and Delivery Times.  In terms of the Labor market, both the Number of Employees and Average Workweek components also saw modest increases.  To the downside, Inventories saw the sharpest decline, but Prices Paid and Prices Received weren’t far behind.  With regards to Prices Paid, after hitting the highest level in a decade two months ago, that component has pulled back quite a lot in the last two months (chart below).

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