After hitting a four-year high in August, the September reading for the Philly Fed Manufacturing survey declined from 28.00 down to 22.5, which was slightly below the consensus forecast of 23.0. In spite of the decline, manufacturing in the region remains steadily positive, confirming the strength we saw earlier in the week from the Empire Manufacturing report.
The table to the right breaks down September's Philly Fed report by each of its sub categories. While the headline reading of this month's report showed a decline, breadth in the report was positive as six out of the nine components saw increases. Areas seeing the biggest improvement were Number of Employees, Unfilled Orders, and Shipments, while Average Workweek and Inventories saw the largest declines. It's interesting to see that while employers are adding more workers, the employees are working less. It's only one datapoint, but it might be a by-product of the Affordable Care Act's requirements that all employees working more than 30 hours per week be covered with health insurance. One way around that requirement is for companies to hire more part-time workers, which is what appears to be happening in this month's report.