US DATA
- The Philly Fed manufacturing business outlook surprisingly surged to 44.3 (cons -5) in January for a huge beat, after an upward revised -10.9 (initial -16.4).
- It’s the highest monthly reading since the 44.4 in Apr 2021 and before that 1984.
- Shipments and new orders were both behind the surge, from 1.7 to 41.0 and -3.6 to 42.9 respectively.
- It’s possible that this is a front-loading of orders ahead of expected tariffs but the comments in the press release don’t have enough detail to shed any light.
- The six-month ahead series meanwhile has been elevated for a few months now, most recently bouncing from 33.8 to 46.3 but holding below the 53.9 in November. This series tends to run higher than the current conditions series though, with recent readings below post-pandemic highs through 2020-2 – see chart.
- Interestingly, on an ISM-equivalent basis, the overall Philly manufacturing series jumped from 48.9 to 61.3, but that kept it more easily contained by some 2021 readings which included the recent high of 65.6 in Nov 2021.
- Nevertheless, it’s far higher than the 50.0 equivalent for the Empire survey (the ISM survey was 49.3 in December for context), and highlighting the recent improvement for Philly, this is only the fourth month since mid-2022 with a >50 reading on this basis.
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