Philly Fed factory index improves in August

The Federal Reserve Bank of Philadelphia's manufacturing sector index printed at 6.2 (consensus: -5.0), which was up from a reading of -12.3 in the month before.

A key sub-index linked to new orders rebounded sharply, from -24.8 to -5.1 while that linked to shipments pushed higher still, from 14.8 to 24.8.

Delivery times on the other hand slowed a bit with the corresponding sub-index rising from -10.2 to 2.7.

Price pressures on the other hand continued to ebb lower with that sub-index falling from 52.2 to 43.6.

The sub-index for number of employees was up from 19.4 to 24.1 and that for the average employee workweek dipped from 6.4 to 6.1.

"Responses to the August Manufacturing Business Outlook Survey suggest steady conditions, on balance, in the region’s manufacturing sector," the Philly Fed said in its report.

"The survey’s future indexes suggest tempered expectations for growth over the next six months."

For his part, Ian Shepherdson, chief economist at Pantheon Macroeconomics, pointed out the improvement in the sub-index for capital expenditures expectations six months ahead, which improved from 4.4 to 18.0 -a four-month high.

He also said more gains were needed in the sub-index in order to be confident of a turnaround, but added that it was a "welcome big move".

"So much for the massive plunge in the Empire State index [...] Overall, the key subindexes are consistent with the national ISM manufacturing index rising slightly in August, to about 54 from 52.8 in July."