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U.s. Philly fED Index Beats Expectations, Soars to 33-Year High in February

U.S. Philly Fed manufacturing index, a reading on Philadelphia-area manufacturing activity unexpectedly surged in the month of February to hit its highest level since January of 1984, the Federal Reserve Bank of Philadelphia revealed in a report on Thursday.

The Philly Fed said its index for current manufacturing activity in the region soared to 43.3 in February from 23.6 in January, defying expectations of a correction after the strong reading since November. The jump surprised economists, who had expected the index to dip to 19.3.

Details of the report showed some softening in regional manufacturing labor demand, as the employment index edged down to 11.1, from 12.8 in January. However, the average workweek increased to 13.6, from 6.8 the previous month, suggesting that hours are catching up with the employment index. New orders rose to 38.0 (previous: 20.5), and shipments rose to 28.6 from 20.5. Inventories fell to -4.7, after three strong months.

"The Philly Fed index is now at a level that, based on the historical relationship, would point to GDP growth of slightly more than 6%." said Paul Ashworth, Chief U.S. Economist at Capital Economics.

"Before we get too carried away, it's important to stress that this is a regional indicator that can be very volatile from month to month," he added.

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May 25 at 1:23 UTC