US Philly Fed index comes in slightly ahead of forecasts

Manufacturing conditions in the north-eastern US cooled a tad in October, according to a monthly gauge on activity crafted by the Federal Reserve bank of Philadelphia.

The headline index derived from the ‘Philly’ Fed’s survey slipped to 20.7 from 22.5.

The consensus expectation was for a retreat to the 20 point mark.

However, perhaps the most important of all the sub-indices contained in the same report, which is linked to new orders, improved to a reading of 17.3 from 15.5 in September.

The sub-indices which track the demand for labour in that part of that country, and in that sector, on the other hand, both decreased.

Thus, a barometer which measures the length of the average work week retreated to -1.3 from 4.4 and another which measures the number of employees fell to 12.1 from 21.2.

Even so, all in all the report may help to steady nerves following a much weaker than expected report on manufacturing from the Federal Reserve bank of New York released on Wednesday.

Commenting on the above figures, Paul Ashworth, chief US economist at Capital Economics, wrote to clients that, in combination with the latest (and better than expected) figures out on industrial production, they show that the impact of slower European and Chinese growth on the US is less than feared by markets.