The so-called Philly Fed came out much stronger for its Manufacturing Business Outlook Survey than expected at 15.2 for the month of June. Bloomberg had a consensus of only 8.0, and the highest economist target for the Philly Fed was 10.5. That also compares to 6.7 for May.
The Philly Fed said:
Indicators for general activity, new orders, and shipments remained positive and increased over their readings in May. Employment and average work hours increased, on balance, at the reporting firms. Firms reported higher prices for raw materials and other inputs in June compared with reported price decreases in recent months. The survey’s indicators of future activity suggest that firms expect continuing growth in the manufacturing sector over the next six months.
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The Conference Board released its Leading Economic Index for the month of May, showing that the United States was up by 0.7% to 123.1, following a 0.7% gain from April and a 0.4% increase in the month of March. Additional components showed the following:
- Coincident Economic Index was up 0.1% in May to 112.1, after a 0.2% increase in April and compared to no change in March.
- Lagging Economic Index rose by 0.2% in May to 117.0, after a 0.2% increase in April and a 0.5% gain in March.
The Conference Board pointed to a stronger second half of 2015:
The U.S. LEI increased sharply again in May, confirming the outlook for more economic expansion in the second half of the year after what looks to be a much weaker first half. While residential construction and consumer expectations support the more positive outlook, industrial production and new orders in manufacturing are painting a somewhat more mixed picture.
In short, these are just two more stronger readings for the Federal Reserve to have in the quiver to raise rates. And that is on top of two strong reports earlier Thursday morning, making a total of four stronger economic reports.
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