Philly Fed Index Indicates Substantially Faster Growth In January

Growth in Philadelphia-area manufacturing activity showed a substantial acceleration in the month of January, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.

The Philly Fed said its diffusion index for current general activity spiked to 17.0 in January from an upwardly revised 2.4 in December. A positive reading indicates growth in regional manufacturing activity.

Economists had expected the Philly Fed index to climb to 3.9 from the 0.3 originally reported for the previous month.

The sharp jump by the headline index reflected notable accelerations in the pace of growth in both new orders and shipments.

The new orders index surged up to 18.2 in January from 11.1 in December, while the shipments index soared to 23.4 from 15.7.

The number of employees index also climbed to 19.3 in January from 16.8 in December, indicating an acceleration in the pace of job growth.

The report also said the prices paid index increased to 22.1 in January from 15.9 in December, while the prices received index rose to 14.7 from 11.0.

Looking ahead, the survey's future activity indexes remained at relatively high readings, suggesting continued optimism about growth for the next six months.

The Philly Fed said the diffusion index for future general activity climbed to 38.4 in January from a revised 34.8 in December.

On Wednesday, the New York Fed released a separate report showing a modest acceleration in the pace of growth in regional manufacturing activity in the month of January.

The New York Fed said its general business conditions index edged up to 4.8 in January from a revised 3.3 in December, with a positive reading indicating growth in regional manufacturing activity.

Economists had expected the general business conditions index to come in unchanged compared to the 3.5 originally reported for the previous month.