Following on the heels of yesterday's stronger than expected Empire Manufacturing report, today's release of the Philly Fed Manufacturing report for January also came in stronger than expected. While economists were looking for the headline index to come in at a level of 8.7, the actual reading was slightly higher at 9.4, which was three 3 points higher than the reading for December.
The table above breaks down this month's report by each of the report's sub-components (charts of each provided below). As shown, the majority (five) of components increased this month, while just three declined. The biggest increases this month came from Number of Employees and Unfilled Orders. The fact that Number of Employees increased seems to provide more evidence that last Friday's employment report was an outlier. On the downside, the biggest declines were seen in Inventories, Average Workweek, and New Orders. Believe it or not , the 35.6 decline in the Inventories index was the largest month to month drop in the history of the survey (since 1980). While that drop is large for one month, it takes that index back to levels seen as recently as April.