The Philadelphia Federal Reserve’s business index reached a two-year high in the latest report, with significant improvements in employment numbers, new orders, shipments, and unfilled orders. However, inventories declined and average employee workweek saw a notable decrease. Looking ahead, while the six-month index declined slightly, all key indicators showed positive outlooks for the next six months.
The increase in prices paid is a cause for concern as it aligns with fears of inflation. Prices paid surged to +23.0 from +3.7 in the previous report, which is significantly higher than the 2022 levels. This rise could be attributed to increasing oil prices rather than broader cost pressures. It is important to note that last month’s increase may have been an anomaly and further monitoring is needed to determine its sustainability.
Employment numbers saw a slight decrease from -9.6 to -10.7, indicating some improvement but still negative. New orders showed a substantial increase from +5.4 to +12.2, indicating stronger demand for goods and services.
Shipments also increased from +11.4 to +19.1, showing a significant improvement in delivery times as they moved from -16.7 to -9.4.
Unfilled orders also increased from +1.0 to +0.8, indicating that there is still some demand that has not yet been met.
Looking ahead, while the six-month index declined from 38.6 to +34.3, all key indicators showed positive outlooks for the next six months.
Overall, while there are some positive signs in the latest report on Philadelphia Federal Reserve’s business index
