After just barely breaking an 18-month streak of readings above +20 last month, the Philadelphia Fed Manufacturing report rebounded more than expected in July, rising from 19.9 up to 25.7 compared to consensus forecasts for a reading of 21.5. With this month’s reading, the Philly Fed reading of General Business Conditions has now been above +10 for 20 months as well as in every month since the 2016 election. The only other period since 1980 where the index was above +10 for a longer period of time was in the 21-month stretch ending in April 2005.
In terms of the breadth of this month’s report, things were generally positive. Most components saw m/m gains with the biggest increases coming in Unfilled Orders, New Orders, and Prices Paid. The only three categories that saw declines were Number of Employees, Average Workweek, and Shipments.
In the case of Prices Paid, that index has been soaring of late. Its current level of 62.9 is the highest monthly reading we have seen in a decade, eclipsing the prior peak from February 2011. Going all the way back to 1980, there have only been nine months where the index was higher.