US DATA: Philly Fed Optimism Continues To Soar, Even If Activity Doesn't (1/2)

The Philadelphia Fed's Manufacturing Survey for November tells two very different stories: the first is of stagnant ongoing activity, but the second is of a reflationary rebound within the next 6 months.

• Per the Philadelphia Fed, the -5.5 headline reading for general activity (just the second negative reading since January and vs 10.3 prior, 8.0 expected) suggests "softer regional manufacturing activity this month. The indicator for current activity fell into negative territory, and the new orders and shipments indexes also declined but remained positive. On balance, the firms indicated an increase in employment, and the price indexes were near their long-run averages."
• Notably, the average workweek jumped to its highest level since April 2022, amid a broader increase in employment.
• Otherwise, the Current Indicators were largely consistent with the softness seen in recent months: MNI's rough estimate of the ISM-weighted equivalent for November's report is 49.2, which would be a 5-month low and in stagnation territory.

But the survey also showed a surge in expectations for growth and inflation over the next six months: future general activity rose to 56.6 (highest since June 2021) from 36.7 prior, with future new orders and shipments also reaching 3+ year highs. Employment expectations rose too, to 34.2 from 27.3.