US DATA: Philly Fed Mfg Shows Jump In Activity, Fading Current Inflation

The Philadelphia Fed's regional Manufacturing Business Outlook Survey was much stronger than expected in September, with a rise in the headline General Business Conditions index to 23.2 (-0.3 prior, 1.7 expected) marking the highest level since January. 

• It should be noted that this is a rebound from an unexpectedly weak August survey that seems out of sync with regional peers (the neighboring Empire State survey saw a solid rebound to a 9-month high in August, only to revert in September).
• The 6-month ahead outlook rose to 31.5 from 25.0, for a 4-month high, with shipments up to 26.1 (7-month high) from 4.5 and new orders to 12.4 (2-month high) from -1.9. The employment index was little changed at 5.6 (5.9 prior).
• The inflation components of the survey were much more benign in terms of current conditions: prices paid fell 20 points to 46.8, a 3-month low, with prices received down 17.3 points to 18.8, an 8-month low.
• However, 6-month expectations remained elevated: prices paid ticked up 1.4 points to a 2-month high 69.1, while prices received jumped 16.3 points to 64.8, the 2nd highest reading since August 2021.
• The improvement in activity conditions appears to come alongside some relief on incoming inflation, though with the outlooks remaining cautious on both fronts and the survey's notorious volatility, we would take caution in over-interpreting one month's reading.