Calendar › Philadelphia Fed manufacturing survey › 2026-10-15
Philly Fed 20.9 vs 28.4 Est — New Orders Drop 25 Points to 4.3, Prices Received Jump
Fundamentals · 2026-10-15
The Philadelphia Fed's general activity index fell 16.9 points to 20.9 in October, against a 28.4 consensus, a second straight decline and 26.5 points off August's 47.4; new orders −24.9 to 4.3, the lowest since May and the 14th-largest monthly drop in 702 months since 1968; shipments 15.3 (−12.4); unfilled orders 2.4 (−18.0); delivery times 8.5 (−18.0); but prices received rose 8.8 to 40.1, the highest since May 2025, while prices paid fell 5.4 to 43.2; employment 9.1, workweek 7.5; forward, future general activity fell 19.9 to 33.0, the lowest since January, and future employment fell 20.5, the largest drop since October 2008; future inventories rose to 23.4, the highest since March 2022; special question: 52% plan higher capital spending in 2027 and none plan lower. Survey window 5-12 October.
What It Changes
- The demand side cracked. The headline missed 28.4 consensus (TradingEconomics) by 7.5 points, but the bigger move is new orders falling from 29.2 to 4.3. In September this feed noted Philadelphia's demand "did essentially nothing" while New York's stalled. In October Philadelphia's stalled.
- Pricing power went the other way. Prices received rose to 40.1, in the top 5% of the survey's history, while prices paid fell. Firms are raising their own prices faster than their costs are rising, on weaker orders. That is the margin-widening the morning's PPI showed in wholesale trade.
- The regional story flipped in a month. Today's Empire survey jumped to 25.5, its highest since December 2021, with new orders up 21 points. In September New York was the weak district and Philadelphia the strong one; in October it is the reverse. Two panels moving 30-plus points in opposite directions on new orders says to read either one alone with care.
- For the Fed it adds to the stagflation mix of the morning, not to either side alone. Hot PPI, a soft retail control group, and now a manufacturing survey with falling orders and rising selling prices.
Impact
- USD — Mixed, lean bearish — a miss on activity and orders argues against urgency, but higher selling prices argue the other way, and Philadelphia rarely moves the dollar on its own.
- It printed at 08:30 with PPI, retail sales, claims and Empire State, so its own effect cannot be separated. Across the cluster, DXY was +0.02% from 08:29 to 08:49 ET and is −0.37% on the day.
- US Indices (ES / NQ / YM / RTY) — Mixed, lean bearish — the read is strongest for RTY and YM, which carry the most manufacturing and cyclical exposure.
- Falling orders are a growth negative; firms raising prices into weaker demand protects margins in the short run but keeps the inflation side of the Fed's problem alive.
- Gold (GC) — Slight bullish — a softer growth signal supports the slowdown reading behind the overnight haven bid, and gold is +1.35% on the day at 08:49 ET.
Inside The Number
The diffusion index for current general activity fell 16.9 points to 20.9 in October, against a consensus of 28.4, after 37.8 in September and 47.4 in August. Just over 41% of firms reported higher activity, down from 45%, and 20% reported lower, up from 8%. The share reporting no change fell to 27% from 45%, so firms moved off the fence in both directions, more of them downward.
Where 20.9 sits. It is the lowest reading since June's 10.3, but it still ranks 176th of 702 months since May 1968, above three-quarters of the survey's history, whose average is 8.9. Philadelphia's 2026 average is 23.1. This is a district coming down from an exceptional summer, not one in contraction.
New orders are the story. The index fell 24.9 points to 4.3, the lowest since May's −1.7. That fall ranks 14th-largest of 701 monthly changes on record. Almost 39% of firms reported higher orders and 34% reported lower, against 44% and 15% in September. The reporting-lower share more than doubled. Shipments fell 12.4 points to 15.3 and unfilled orders fell 18.0 points to 2.4, so backlogs that were building in September are now flat.
Supply pressure eased at the same time. Delivery times fell 18.0 points to 8.5, the 8th-largest monthly drop on record, after September's 22.8-point jump. That fits weaker orders: when new business slows, suppliers catch up. Inventories were little changed at −12.8.
The prices tell the hidden story. Prices paid fell 5.4 points to 43.2, with 43% of firms reporting higher input costs and, notably, none reporting decreases. Prices received rose 8.8 points to 40.1: 41% of firms raised their own prices, up from 33%, and only 1% cut them. That reading ranks 38th of 702 and is the highest since May 2025. The gap between paid and received narrowed to 3.1 points from 17.3. Philadelphia firms are passing costs on more fully than at any point this year, and they are doing it while orders fall.
Hiring held, hours did not. Employment edged down 2.7 points to 9.1: 18% of firms added staff, 9% cut and 68% held steady. The average workweek fell 10.5 points to 7.5, the lowest since June. Cutting hours before headcount is the usual first step when orders slow.
Expectations fell across the board. Future general activity fell 19.9 points to 33.0, its second straight decline and the lowest since January. That is almost exactly the survey's long-run average of 33.9. Future new orders fell 25.3 points to 37.0 and future shipments 25.9 to 35.2, the 6th- and 7th-largest drops on record. Future employment fell 20.5 points to 30.1, the largest monthly fall since October 2008, though it more than reversed September's 15.2-point rise. Future workweek fell 21.7 points, the 3rd-largest drop on record. Future delivery times fell 26.1 points to −7.5, also the 3rd-largest drop, and the lowest since December 2023.
Two forward readings went up. Future inventories rose 11.8 points to 23.4, the highest since March 2022: firms plan to rebuild stock even as they expect slower orders. And while both future price indexes fell, they remain high: future prices paid 62.9 and future prices received 62.1, the latter in the 86th percentile, after September's 72.3, which was the highest since 1981.
The capital spending question is the most positive part of the release. Asked about 2027 against 2026, 52.2% of firms expect higher total capital spending and none expect lower. A year ago, 36% expected higher and 19% lower. Expectations were most widespread for noncomputer equipment (50% higher, none lower), then software and computer hardware (each 39% higher, 9% lower). Energy-saving investment was the weakest category, with 14% expecting lower spending. The monthly future capital expenditures index edged down 2.2 points to 34.9, still in the 90th percentile.
Against Empire, the two districts swapped places. Empire's general business conditions index rose 18 points to 25.5, its highest since December 2021, with new orders up 21 points to 23.2 and shipments up 16 to 13.1. Philadelphia's new orders fell 25 points to 4.3. Empire collected responses 2-9 October and Philadelphia 5-12 October, so the windows overlap almost entirely, and both closed before Wednesday's CPI and the AI selloff. Prices point the same way in both: Empire's prices received rose 3 points to 30.6 and its future price indexes climbed. Philadelphia's prices received rose 9 points to 40.1.
The Internals
Current indexes, October against September:
Index · October · September · Change · Read
General activity · 20.9 · 37.8 · −16.9 · Missed 28.4 consensus; lowest since June
New orders · 4.3 · 29.2 · −24.9 · 14th-largest drop on record; lowest since May
Shipments · 15.3 · 27.7 · −12.4 · Still positive
Unfilled orders · 2.4 · 20.4 · −18.0 · Backlogs stopped building
Delivery times · 8.5 · 26.5 · −18.0 · 8th-largest drop; supply easing
Inventories · −12.8 · −12.5 · −0.3 · Still drawing down
Prices paid · 43.2 · 48.6 · −5.4 · No firm reported lower costs
Prices received · 40.1 · 31.3 · +8.8 · Highest since May 2025; 95th percentile
Employment · 9.1 · 11.8 · −2.7 · Hiring steady
Average workweek · 7.5 · 18.0 · −10.5 · Lowest since June
Responses behind the headline numbers:
Index · Increase · No change · Decrease · Diffusion
General activity · 41.2% · 27.2% · 20.3% · 20.9
New orders · 38.5% · 21.7% · 34.1% · 4.3
Shipments · 35.9% · 38.3% · 20.6% · 15.3
Prices paid · 43.2% · 51.5% · 0.0% · 43.2
Prices received · 41.1% · 52.2% · 1.0% · 40.1
Employment · 18.0% · 67.6% · 8.8% · 9.1
Average workweek · 14.7% · 71.5% · 7.2% · 7.5
Expectations six months ahead:
Index · October · September · Change · Read
Future general activity · 33.0 · 52.9 · −19.9 · Lowest since January; at its long-run average
Future new orders · 37.0 · 62.3 · −25.3 · 6th-largest drop on record
Future shipments · 35.2 · 61.1 · −25.9 · 7th-largest drop on record
Future unfilled orders · −1.6 · 16.8 · −18.4 · Backlogs expected to shrink
Future delivery times · −7.5 · 18.6 · −26.1 · 3rd-largest drop; lowest since December 2023
Future inventories · 23.4 · 11.6 · +11.8 · Highest since March 2022
Future prices paid · 62.9 · 71.3 · −8.4 · Still 70th percentile
Future prices received · 62.1 · 72.3 · −10.2 · Still 86th percentile
Future employment · 30.1 · 50.6 · −20.5 · Largest drop since October 2008
Future workweek · 10.1 · 31.8 · −21.7 · 3rd-largest drop on record
Future capital expenditures · 34.9 · 37.1 · −2.2 · Still 90th percentile
Where this month's readings sit in 702 months since May 1968, from the Philadelphia Fed's historical data:
Reading · Value · Rank from the top · Last month higher or lower
Prices received · 40.1 · 38th, 95th percentile · Last higher: May 2025, at 40.8
Future inventories · 23.4 · 29th, 96th percentile · Last higher: March 2022, at 30.4
Future capital expenditures · 34.9 · 68th, 90th percentile · Last higher: September 2026, at 37.1
General activity · 20.9 · 176th, 75th percentile · Last lower: June 2026, at 10.3
Prices paid · 43.2 · 187th, 73rd percentile · Last lower: August 2026, at 40.9
Future general activity · 33.0 · 355th, 49th percentile · Last lower: January 2026, at 25.5
New orders · 4.3 · 476th, 32nd percentile · Last lower: May 2026, at −1.7
The general activity and new orders path this year:
Month · General activity · New orders · Prices paid · Prices received
January 2026 · 12.6 · 14.4 · 46.9 · 27.8
February 2026 · 16.3 · 11.7 · 38.9 · 16.7
March 2026 · 18.1 · 8.6 · 44.7 · 21.2
April 2026 · 26.7 · 33.0 · 59.3 · 33.5
May 2026 · −0.4 · −1.7 · 47.9 · 26.3
June 2026 · 10.3 · 27.3 · 53.2 · 20.3
July 2026 · 41.4 · 37.0 · 53.9 · 27.4
August 2026 · 47.4 · 30.1 · 40.9 · 17.7
September 2026 · 37.8 · 29.2 · 48.6 · 31.3
October 2026 · 20.9 · 4.3 · 43.2 · 40.1
Philadelphia against New York, October:
Index · Empire, New York · Philadelphia · Read
General activity · 25.5, up 18 · 20.9, down 16.9 · Crossed in opposite directions
New orders · 23.2, up 21 · 4.3, down 24.9 · The sharpest divergence in the pair
Shipments · 13.1, up 16 · 15.3, down 12.4 · Now similar levels
Unfilled orders · 14.0, up 8 · 2.4, down 18.0 · New York building backlog
Delivery times · 19.8 · 8.5, down 18.0 · New York supply still tight
Prices paid · 59.5, down 4 · 43.2, down 5.4 · Both off their highs
Prices received · 30.6, up 3 · 40.1, up 8.8 · Both rising; Philadelphia faster
Employment · 10.3, unchanged · 9.1, down 2.7 · Almost identical
Average workweek · 9.1 · 7.5, down 10.5 · Almost identical
Future general activity · 21.0, down 8 · 33.0, down 19.9 · Both less upbeat
What The Firms Actually Said
Special question: comparing 2027 with 2026, do you expect capital expenditures to be higher, the same or lower?
Category · Higher · Same · Lower · Diffusion
Total capital spending · 52.2% · 47.8% · 0.0% · 52.2
Noncomputer equipment · 50.0% · 50.0% · 0.0% · 50.0
Software · 39.1% · 52.2% · 8.7% · 30.4
Computer and related hardware · 39.1% · 52.2% · 8.7% · 30.4
Structures · 34.8% · 56.5% · 8.7% · 26.1
Energy-saving investments · 27.3% · 59.1% · 13.6% · 13.6
Other · 0.0% · 100.0% · 0.0% · 0.0
- Last year's answer was far weaker. When the same question was asked a year ago, 36% expected higher capital spending and 19% expected lower. This year it is 52% and zero.
- Equipment leads, not technology. Half the panel expects to spend more on noncomputer equipment, more than on software or computer hardware.
- At least half the firms expect no change in every category, so the plans are widespread but not universal.
- It sits awkwardly with the monthly data. Firms report falling orders and expect less activity six months out, yet none plans to cut capital spending next year. Either the investment plans are already committed, or firms read October's order drop as temporary.
Against This Morning's Open
- The Open listed Philadelphia at 08:30 with a 28.4 consensus after 37.8 and tagged it for USD and ES, but put its weight on PPI and the retail sales control group — The Open. The 20.9 print missed, and its falling orders point the same way as the soft control group: weaker demand, firmer prices.
What This Sets Up
- Next Philadelphia Fed survey: November, expected Thursday, 19 November, 8:30am ET, after the 27-28 October FOMC.
- The read to confirm or break is whether new orders recover. A rebound toward the 20s would make October a one-month air pocket, as May was. A second reading near zero would turn a cooling into a slowdown.
- Watch prices received against new orders. Firms raising prices into falling orders is sustainable for a month or two. If orders keep falling, pricing power usually fades next.
- Watch whether Empire and Philadelphia converge. They have swapped places in a month. November will show which district was the outlier.
What Is This?
- What it is: The Federal Reserve Bank of Philadelphia's Manufacturing Business Outlook Survey, published at 8:30am ET on the third Thursday of each month. It has run monthly since May 1968 and asks manufacturers in the Third District, which covers eastern Pennsylvania, southern New Jersey and Delaware, whether activity, orders, shipments, employment and prices rose, fell or stayed the same, now and six months ahead. A special question rotates each month.
- Why it matters: With New York's Empire survey, it is one of the first reads on manufacturing each month, and it arrives about two weeks before ISM. With inflation hot in both CPI and PPI and an FOMC on 27-28 October, the prices received index shows how much pricing power producers have, and new orders show whether demand can absorb it.
- How to read it: Each index is a diffusion index: the share of firms reporting an increase minus the share reporting a decrease, so zero is the line between expansion and contraction, and the series is seasonally adjusted. The general activity headline is a separate question, not an average of the components, so read new orders and shipments to see what is driving it. Compare prices paid with prices received for margin pressure. Treat any single month with care: the panel is small, the series is volatile, and moves of 15 to 25 points are common.
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_For informational purposes only. Not investment advice._