The Nov Philly Fed manufacturing survey was 16.7, 4.5 pts above expectations and up from 11.5 in Oct. It’s the highest since June ’07 but the figure measures the direction of change, not the degree. New Orders jumped sharply to 14.8 from 6.2 but Backlogs fell 4 pts to -5.4. Employment improved by more than 6 pts and is almost flat at -.5, the least negative since May ’08 and the average workweek rose to +2, the 1st positive reading since Jan ’07. Inventories rose to -17.3 from -31.8 but it just back to the Sept level and is in line with the 6 mo average, so again, no sign of inventory rebuilding, just a slowed pace of the destocking. Prices Paid fell 6 pts but is just back to its Sept level. Prices Received rose 3 pts, matching its best level since Oct ’08. The 6 month outlook moderated as it fell 3 pts to the lowest since April ’09. Net-net, this data confirms that manufacturing is slowly improving with slack end demand keeping the sustainability in question.
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