Today's release of the Philly Fed report for the month of August not only came in stronger than expected, but the General Business Conditions index hit its highest level since March 2011. While economists were forecasting a level of 19.7, the actual reading came in at 28.0, up from last month's reading of 23.9.
Strangely enough, while the headline reading of the Philly Fed report showed strength, the business indicators within the report were practically all weak. As shown in the table to the right, seven of the nine indicators declined this month, reversing last month's gains. The biggest declines of the general business indicators came in New Orders and Shipments. In fact, while the headline reading of this month's report was the best since March 2011, the New Orders component saw its largest monthly decline since August of that same year. Net net, on the surface there was a lot to like about the report, but after digging into the internals a lot of the bloom came off the rose.