Today’s report on manufacturing activity in the Philadelphia region showed a nice rebound from May’s reading, rising from 6.7 up to 15.2 and ahead of consensus expectations for a reading of 8.0. Just to highlight how uncommon better than expected readings in this indicator have been, this month’s report was only the second better than expected report of the year. While June’s headline reading was the best level of the year, as shown in the chart below, it is still well off its highs from late last year.
The table to the right breaks down this month’s report based on each of the Philly Fed’s individual sub-components. As shown, breadth in this month’s report was strong with just two components (Delivery Time and Number of Employees) declining while seven increased. The biggest increase by far was in Prices Paid which spiked from -14.2 in May to 17.2. That 31.4-point increase was the largest one-month increase in the Prices Paid component on record (since 1980). That big of an increase will always raise eyebrows, but as the chart below illustrates, Prices Paid is a volatile component of a volatile series. Other components that saw double-digit increases this month were Shipments, New Orders, Average Workweek, and Prices Received. All in all, a solid report.