Analysts at Nomura note that the US headline Philly Fed index rebounded strongly to 38.8 in May from 22.0 in April, above expectations (Nomura: 22.0, Consensus: 18.5).
“This rebound is a sharp contrast to the May Empire State survey headline index, which fell notably in the month below the elevated readings after the election. The sub-indexes of the Philly Fed survey remained high. The shipments index jumped 15.7pp to 39.1. The new orders index inched down 2pp to 25.4, which is still a highly elevated reading. Indicators of labor market conditions held up. The number of employees index decreased slightly by 2.6pp to 17.3, but the average workweek index rose 2.8pp to 21.7.”
“Although strength in current indicators suggests continued growth in regional manufacturing activity, forward-looking indicators mostly decreased, suggesting diminished optimism. Notably, the six-month ahead general business activity index fell 10.6pp to 34.8.”