Philadelphia Fed factory index jumped to a near five-year high in July

Forty-one point four. That is where the Philadelphia Fed's gauge of regional factory activity landed in July, up 31 points from June and its highest reading since November 2021. The bank's Manufacturing Business Outlook Survey, released Thursday, is a diffusion index: it measures the share of firms reporting growth minus the share reporting decline, so a positive number means more factories expanded than contracted. New orders rose to 37.0 and shipments to 33.7, both multi-year highs. The employment index stayed positive for a second straight month. The survey covers only the third Federal Reserve district, and it reads sentiment rather than counting output, so it swings sharply and is best treated as a signal of direction.