The Philadelphia Fed Business Outlook Survey for October surprised to the downside. The consensus range was -4.0 to 3.0. The actual number was -4.5.
The Philadelphia Fed Business Outlook Survey suggests that the contraction in the U.S. economy from weak exports is spreading outward and now seeping into the Mid-Atlantic manufacturing sector. This is the second drop in a row.
New orders fell 20 points from September to -10.6. Shipments fell 19.9 points from September to -6.1. Employment is now contracting at -1.7, a whopping 11.9 point fall from September.
Traders track the Philly Fed Business survey because it gives a detailed look at the manufacturing sector, how busy it is, and where things are headed. Traders like to see healthy economic growth in the manufacturing sector because that translates to higher corporate profits. Since manufacturing is a major sector of the economy, this report has a big influence on market behavior.