Philly, Empire manufacturing gauges show solid growth, rising prices in March

BloombergSunoco Inc. Philadelphia refinery sits on the banks of the Schuykill River.

The numbers: Two gauges of manufacturing sentiment reflected continued solid activity in March, according to data released Thursday.

The Philadelphia Fed manufacturing index slipped to a reading of 22.3 in March from 25.8 in February. Economists had expected a reading of 23.

The Empire State Index, which had been lagging Philly, jumped to a reading of 22.5 in March from 13.1 in February, the New York Fed said. Economists had expected a reading of 15.

Both gauges are well above zero, the line that indicates improving conditions.

Both districts reported continued high input prices.

Boomy.Details of the Philly and NY Fed manufacturing surveys remain very strong in March. pic.twitter.com/eGvhvGscvA

What happened: In Philadelphia, the details were much stronger than the headline. The new orders gauge rose to 35.7 from 24.5. The shipments gauge also jumped to 32.4 from 15.5. The prices paid index fell 2 points to 42.6, but remained near last month's reading which was the highest since 2011.

In the New York region, the shipment gauge jumped 14.5 points to 27. New orders had a smaller, 3.3-point gain to 16.8. The prices paid rose again to 50.3 from 45, its highest level in six years, the New York Fed said.

Big picture: The manufacturing sector is humming along, reaching its most robust pace in nearly 15 years, economists said. The national measure, the ISM manufacturing index, rose to 60.8 in February, its highest level since May 2004. One dark cloud is U.S. trade policy. Counter tariffs from trading partners could have an adverse impact on domestic manufacturing, analysts said. In addition to announcing tariffs on aluminum and steel, President Donald Trump has signaled he wants to trim the U.S. trade deficit with China by $100 billion.

What are they saying?: "Manufacturers across the mid-Atlantic and the New York region remain very positive about their outlooks for business. With strong new order growth, the only concern is that both surveys continue to suggest a moderate acceleration in input prices," said J. Connelly, head of research at Contingent Macro Research.

Market reaction: U.S. stocks gained Thursday, maintaining an early advance after the economic data was released.