While manufacturing activity in the New York region was slightly weaker than expected earlier in the week, the Philly Fed manufacturing report handily exceeded forecasts.  While economists were forecasting the headline reading to come in at a level of 15.3, the actual reading came in at 23.6, which was the highest level since November 2014.

Philly Fed Chart 011917

Philly Fed Chart 011917 TableThe internals of this month’s report were solid with just two of nine components declining, and the declines (Shipments and Average Workweek) were modest at that.  On the upside, there were big gains in Prices Received (even as Prices Paid saw just a modest increase), New Orders, and Inventories.  Below we have included the charts of New Orders, Unfilled Orders, and Prices Received.  The index for New Orders is back up near its highs from November 2014, while Unfilled Orders was even stronger hitting its highest level since March 2011.  The most standout chart, though, is Prices Received.  As shown in the bottom chart, that component is now at its highest level since July 2008.

Philly Fed Chart 011917 New and Unfilled Orders

Philly Fed Chart 011917 Prices Received

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