After last month’s positive report provided a glimmer of hope that manufacturing in the Philadelphia region was on the rebound, the December Philly Fed report dashed those hopes as it came in weaker than expected and moved back into negative territory. While economists were expecting the headline General Business Conditions index to come in just above zero at +1, the actual reading was -5.9. As many are probably aware, the Philly Fed report is a volatile reading, so in the big scheme of things there isn’t much of a difference between +1 and -5.9, but it’s more of a psychological disappointment that the headline index moved back into negative territory.
The table to the right breaks down this month’s report by each of the index’s main components. Breadth in this month’s report was skewed slightly negative with five declines and four increases. The biggest gainers this month were Average Workweek, Inventories, and Shipments, while the biggest declines came in Unfilled Orders and Prices Received.