Philly Fed Manufacturing “continued to expand” in September

Note: Be careful with diffusion indexes. This shows a rebound off the bottom – some improvement from May to September – but doesn’t show the level of activity.

Earlier from the Philly Fed: September 2020 Manufacturing Business Outlook Survey

Manufacturing activity in the region continued to expand this month, according to firms responding to the September Manufacturing Business Outlook Survey. The survey’s current indicators for general activity, new orders, and shipments remained positive for the fourth consecutive month. The employment index improved in September and remained in positive territory for the third consecutive month. Nearly all of the future indexes increased, suggesting more widespread optimism among firms about growth over the next six months.

The diffusion index for current activity fell 2 points to 15.0 in September, its fourth consecutive positive reading after reaching long-term lows in April and May… On balance, the firms reported increases in manufacturing employment for the third consecutive month: The current employment index increased 7 points to 15.7 this month.
emphasis added

This was close to the consensus forecast. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Fed Manufacturing Surveys and ISM PMI Click on graph for larger image.

The New York and Philly Fed surveys are averaged together (blue, through September), and five Fed surveys are averaged (yellow, through August) including New York, Philly, Richmond, Dallas and Kansas City. The Institute for Supply Management (ISM) PMI (red) is through August (right axis).

These early reports suggest the ISM manufacturing index will likely not change much from the August level.

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