Philadelphia Fed Survey points to acceleration in manufacturing

Acceleration is very strong right now in the Philly Fed's manufacturing region. The general business activity index rose 2.4 points to 17.8 to signal the strongest rate of monthly growth since October last year. New orders are up 6.1 points from May to 16.8 with unfilled orders turning higher, at a very strong 11.5 for a 14.0 point gain.

Inventories are being drawn down as shipments, at 15.5, move higher. Price data are of special interest given yesterday's Fed decision that downplayed recent pressures. Price pressures for raw materials in the Philly Fed region are strengthening noticeably this month, to 35.0 for a 12.0 point gain. But most of the pressure is not, at least yet, passing through to final prices where pressure eased 2.9 points to 14.1.

There are two special positives in today's report, acceleration for employment to 11.9 for a 4.1 point gain, and a major gain for the general six-month outlook, to 52.0 from 37.4. Both of these gains ultimately reflect confidence in order books.

Both the reports from the Philly and New York Feds show a major upswing beginning in the spring following the heavy winter which hit these two Fed districts especially hard. The Philly Fed, which is closely watched, should be a plus for risk takers in today's market.