US DATA: Philly Manufacturing Impresses As Firms See Transitory Price Jump

April's Philadelphia Fed manufacturing survey was much stronger than expected, with the headline index (General Business Conditions 26.7 from 18.1, highest since January 2025 and vs 10.0 consensus) underpinned by solid underlying details. Current price indications soared, but there's a hint firms think the war-induced energy shock will prove temporary.

• Standing out in the survey were a near-12 point jump in Shipments to 34.0, the best since May 2022, and New Orders soaring over 24 points to 33, best since November 2021. 6-month Capex expectations, one of the more closely watched sentiment gauges, jumped to 35.2 from 25.8 for the best since last August.
• The weak spot was Employment which fell to a 10-month low -5.1 (0.8 prior) for a 2nd sub-zero month in 3. And from an ISM translation perspective, there was also a pullback in Delivery Times and Inventories.
• Overall the national ISM-equivalent PMI was 54.5, from 54.8 prior - though the latter had been a 14-month high so activity looks to be holding up at strong levels. Combined with the very strong Empire release this month in the neighboring New York region, and the national manufacturing picture looks very solid in April so far, despite the ongoing conflict in the Middle East.
• On that note though, also like Empire, Philly's current prices gauges soared: current Prices Paid rose to 59.3 from 44.7, with received at 33.5 making a similar jump (21.2 prior). This is suddenly the highest current prices paid since June 2022, up from a 13-month low of 38.9 as recently in February and illustrating the impact of energy prices on manufacturers.
• The survey ran through April 13 so the uptick in activity/sentiment may reflect the Iran-US ceasefire agreement reached earlier this month, but clearly, price pressures are building in a way they haven't since 2022.
• It may be some comfort that manufacturers may see this as transitory: the 6-month expectation for prices paid actually dipped to 50.2 from 53.7 for the lowest since August 2024; however the consumer price implications aren't quite so straightforward as passthrough looks to be elevated with 6-month Prices Received up almost 12 points to 50.2.