No More Virus for US Philly FED Manufacturing, As It Surges Higher

Posted Thursday, June 18, 2020 by
Skerdian Meta • 1 min read

The manufacturing sector was already quite weak in the US and around the globe, due to the trade war between US and China. So, when the coronavirus came and people got isolated indoors, manufacturing dived lower, falling in deep contraction. In March this indicator fell to .23 points, in April ti fell further to -56.6 points while last month it came at -43.1 points. This month it was expected to come at -23.0 points, but instead it surged higher to 27.5 points, which was quite surprising.

June 2020 Philly FED Business Outlook Survey


  • June Philly Fed +27.5 vs -21.4 expected
  • May 2020 Philly Fed business outlook was -43.1 points


  • New orders  +16.7 vs -25.7 prior
  • Employment -4.3 vs -15.3 prior
  • Prices paid +11.1 vs +3.2 prior
  • Six-month index +75 vs +49.7 prior (30 year high)
I’m puzzled at why so many economists thought this report and the Empire Fed would be negative. The surveys are on the month-to-month rate of change so it’s basically about whether June would be better than May. After the crushing declines in April/May, some rebound is no surprise.
Overall, 46% of firms reported better general business in the month while 19% said it was worse. This special question gives a better sense of where the industry is overall, showing the bulk of firms operating at about 75% of capacity compared to 85% last year. Just 2.2% are operating in the 90-100% range versus 37% a year ago.
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