The Philly Fed survey was 14.1, 6 points more than expected and up from 4.2 in Aug. It’s at the highest level since June ’07 but the components were mixed as the headline figure is not a sum of its parts. New Orders fell to 3.3 from 4.2 and Employment fell by 1.4 points to -14.3. Backlogs did rise by 2 points but still remains negative. Shipments were up almost 8 points and at the highest since Dec ’07. Similar to the Empire survey, there is no sign that inventories are being refilled and in fact they still remain very lean as this category fell by 18 points to -18.1, the weakest since May. But, hopefully this is a backdrop to an eventual pickup. Prices Paid rose almost 5 points but Prices Received fell by 9. The 6 month outlook fell 9 points to the lowest since May. Net-net, manufacturing conditions are improving but hiring remains punk. “Firms expect conditions to improve over the next 6 months, and they expect modest growth in Q3 and Q4 of this year.”
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