The Philadelphia Fed Manufacturing Index lands on Thursday, 16 October 2025 at 13:30 UK / 08:30 ET, offering one of the first regionals to shape expectations for October’s factory pulse. After September’s outsized +23.2 headline, the strongest since earlier in the year, consensus estimates are looking for a modest 10 (with a low Street Forecast call near 4).
Our read is that momentum cools but remains positive: Our Call: +7. The balance of signals suggests mean reversion from September’s spike amid softer national demand cues, while still-resilient local internals argue against a sudden contraction.
With U.S. PPI dropping at the same time, the market reaction will hinge on the mix of new orders, employment/workweek, and prices paid/received as much as the headline number itself.
| Our Call | Consensus Estimates | Street Forecast | |
| Philadelphia Fed Manufacturing Index – Oct | 7 | 10 | 4 |
Our Call
Base case: +7 – a cooling but still-positive read yet below consensus and a touch above bearish street calls.
Why +7?:
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September’s Philly surge was outsized and typically mean-reverts.
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Forward cues are mixed: national PMIs show demand softness (ISM new orders back sub-50), regionals outside Philly have skewed weaker recently and Empire State for October is roughly flat/soft, arguing for a pullback.
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Still, September’s Philly internals (orders/shipments positive, workweek up, future index firm) argue against a collapse to negative.
Our Call – Outlined
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Last month (Sep): headline surged to +23.2 (highest since Jan). New orders flipped positive (+12.4), shipments jumped (+26.1), employment modestly positive (+5.6), and prices paid cooled but stayed elevated (46.8). The future activity index also improved to 31.5.
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National reads since then: ISM Manufacturing PMI ticked up to 49.1 but new orders slid back to 48.9 (contraction). S&P Global’s Sept PMI also flagged softer demand momentum.
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Other regionals around the turn of the month:
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Empire State (Oct) improved from Sept’s slump but is roughly flat to slightly negative (vs. -8.7 in Sept). That points to cooling after summer strength.
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Richmond (Sep) fell further (-17), Dallas (Sep) weakened (-8.7), and Chicago PMI (Sep) stayed deep sub-50 (40.6). Together they flag softer breadth into October.
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Macro context into the print: price pressure moderated in Sept PPI (Aug y/y cooled to 2.6%; Sept PPI is scheduled for release at the same time as Philly), while CPI has been pushed to Oct 24 due to the shutdown. Philly will publish on time (it’s a Fed survey).
What We’ll be Watching
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New Orders: Expect low-single-digit positive (roughly +2 to +6). A drop back <0 would be the clearest “cooling” signal. (Last: +12.4).
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Shipments: Likely moderate lower from last month’s jump (Last: +26.1).
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Employment / Workweek: Small-positive to flat (Last: +5.6 / +14.9). A dip negative would echo Richmond/Dallas softness.
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Prices Paid/Received: Bias to sideways/slightly lower after Sept’s cool-off, consistent with softer national price momentum. (Last: 46.8 / 18.8).
Distribution / Risks
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< 0: 25% (Empire State softness + weak regionals win out)
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0 to 10: 45% (my base: +7)
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10 to 20: 25% (lingering momentum from Sept)
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> 20: 5% (another outsized upside surprise)
Upside risk: local idiosyncrasies (Philly can whipsaw) or tariff-related front-loading supporting orders. Downside risk: tariff uncertainty and softening domestic demand weighing on orders (mirrored in the other regionals).
Market Reaction
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Print > 15: modest bear-steepening impulse; USD bid on the margins (look to USDJPY topside & EURUSD dips) unless the PPI (same time) contradicts.
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0–10 (base): limited market impact; micro-moves fadeable; focus shifts quickly to PPI and Fed-speak.
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< 0: risk-off tilt; USD softer vs JPY/CHF, USTs bid – especially if prices paid also cool.
Our Call – Conclusion
We expect the October Philly Fed to ease to +7, a touch below consensus but above the most cautious calls, cooling, not cracking. For trading implications, the components will do the heavy lifting: a low positive new-orders print would validate a soft-landing narrative, while a slide back below zero, especially alongside cooler prices paid, would skew risk-off and support duration.
Conversely, a surprise above 15 would revive momentum and nudge USD and front-end yields higher unless contradicted by PPI.
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