Following a sharp fall in June to -7.7, the July Philly manufacturing survey at 3.2 was a touch above expectations at 2.0. This compares with the recent high of 43.4 in March and it follows the 2nd straight month of contraction for the NY survey. New Orders rose from -7.6 to 0.1 but Backlogs remained firmly negative at -16.3. Employment rose to 8.9 from 4.1 but after falling from 22.1 in May. The Average Workweek though did fall to -5.4 from +1.9. Inventories went from -8.5 to +1.4. Prices Paid fell a touch to 25.1 from 26.8 and Prices Received was down to 1.1 from 4.4, the lowest since Nov. The 6 month outlook rose to 23.7 from 2.5 in June (31 month low), 16.6 in May and 33.6 in April. Bottom line as the Philly Fed said, “the region’s manufacturing sector remained weak in July. The survey’s indicators suggested flat demand for manufactured goods this month, while shipments and employment grew only slightly.” As seen in June though, other regions picked up the manufacturing slack that culminated in a good June ISM. Thus, we need to see more data in order to draw a national conclusion from two straight months in a row of weak manufacturing growth in the Northeast.
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