U.S. Mid-Atlantic business activity highest in two years: Philly Fed

NEW YORK (Reuters) - Business activity in the U.S. Mid-Atlantic region increased in January to its strongest level in over two years due to a pickup in new orders and employment and an improved six-month outlook, the Philadelphia Federal Reserve said on Thursday.


The regional central bank's business condition gauge rose to 23.6 last month, which was the highest since November 2014 when it was 34.8. The December reading was revised down to 19.7 from an earlier 21.5.


"The indexes for general activity, new orders, and employment were all positive this month and increased from their readings last month," the Philadelphia Fed said in a statement.


The barometer on Mid-Atlantic business activity, together with other sentiment indicators, has spiked in the aftermath of Donald Trump's U.S. presidential win.


Business owners and investors have anticipated Trump and a Republican-controlled Congress would enact tax cuts, infrastructure spending and looser regulations to promote faster economic growth.

The report's latest reading on new orders rose to 26.0 in January from a revised 14.90 in December, while the employment index jumped to 12.8 from 3.6.

The six-month business outlook increased to 56.6, the highest since August 2014.

Despite a rosier outlook, companies surveyed remained cautious in hiring more workers in the coming months.

When asked how they would meet higher output in the next quarter, only 13.6 percent of companies said they would do so by increasing its staff.

Economists are waiting to see whether the recent surge in business optimism portends faster factory output.

"We will look to official industrial production and manufacturing data to see if this is translating into output growth for the sector," Barclays economists wrote in a research note.

(Reporting by Richard Leong; Editing by Chizu Nomiyama)

Latest From ...
Most Popular From ...