Midwest Manufacturing Business Outlook Survey Rebounds in August

The Philadelphia Fed’s Manufacturing Business Outlook Survey of manufacturing activity in the mid-Atlantic region rose in August to 8.3 after tanking to 5.7 in July. The reading came in above Wall Street expectations for a gain to 7.

The survey’s broadest measure of manufacturing conditions–the diffusion index of current activity–jumped from 5.7 in July to 8.3 in August, and has hovered around this range throughout the year. The percentage of firms reporting an increase in employees in August (21 percent) exceeded the percentage reporting a decrease (16 percent), and the corresponding diffusion index for current employment increased 6 points, to 5.3. Firms reported modest increases in the workweek: The percentage of firms reporting a longer workweek (16 percent) was greater than the percentage reporting a shorter workweek (7 percent).

The midwest manufacturing report follows the release of the New York Federal Reserve’s Empire State Manufacturing Survey earlier this week, which plummeted to -14.92 in August from 3.86 in July. That is its lowest level since 2009, and the reading not only widely missed expectations but also showed contraction.