USA Philly Fed Manufacturing Declines Less Than Expected

Economics Research 17 September 2026 | 9:40AM EDT

USA: Philly Fed Manufacturing Declines Less Than Expected; Housing Starts Below Expectations, but Single-Family Starts Rise; Boosting Q3

BOTTOM LINE: The Philadelphia Fed manufacturing index decreased by less than Jan Hatzius | expected in September, after reaching in August its highest level since April 2021. Goldman Sachs & Co. LLC

The composition of the report was soft, with declines in the employment and new David Mericle | orders components. Both the prices paid and the prices received measures Goldman Sachs & Co. LLC increased. Housing starts fell 2.6% in August, below expectations, while building permits decreased by 2.7%, somewhat below consensus expectations. While total Alec Phillips | Goldman Sachs & Co. LLC housing starts declined in August, single-family housing starts—the component of the report relevant for GDP tracking—increased and the July growth rate was revised Ronnie Walker | up. We boosted our Q3 GDP tracking estimate by 0.2pp to +3.2% Goldman Sachs & Co. LLC (quarter-over-quarter annualized). Initial claims decreased by 10k to 196k, below Pierfrancesco Mei consensus expectations. Continuing claims fell to the lowest level since January | 2024. The declines in initial and continuing claims this week potentially reflected Goldman Sachs & Co. LLC

difficulties seasonally adjusting around the Labor Day holiday, which occurred Jessica Rindels | relatively late this year. Goldman Sachs & Co. LLC

US MAP: Abhay Duggirala | Philadelphia Fed manufacturing index +4 (4, +1) Goldman Sachs & Co. LLC

Philadelphia Fed manufacturing index +37.8 for September vs. GS +30.0, median forecast +32.1, prior +47.4

Housing starts -2.6% for August (1,275k SAAR) vs. GS +8.9% (1,349k SAAR), median forecast +6.7% (1,322k SAAR), prior revised -9.0% (1,309k SAAR)

Building permits -2.7% for August (1,394k SAAR) vs. median forecast -1.5% (1,411k SAAR), prior revised +4.3% (1,433k SAAR)

Initial claims 196k for the week ended September 12 vs. GS 195k, median forecast 207k, prior 206k

Continuing claims 1,730k for the week ended September 5 vs. median forecast 1,779k, prior revised 1,769k

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1. The Philadelphia Fed manufacturing index decreased (-9.6pt to 37.8) in September, above expectations for a larger decline, after reaching in August its highest level since April 2021. The composition of the report was soft, with declines in the employment (-16.1pt to 11.8) and new orders (-0.9pt to 29.2) components and an unchanged reading for the shipments component at 27.7. Both the prices paid (+7.7pt to +48.6) and the prices received (+13.6pt to +31.3) measures increased. The delivery times component increased by 22.8pt to 26.5, indicating that delivery times increased on net. This marks the highest level in the delivery times component since March 2022, consistent with similar increases in delivery times observed across other business surveys. The 6 months-ahead business conditions index declined by 20.7pt to +52.9, after reaching in August its highest level since 1983.

2. Housing starts declined 2.6% to 1,275k (SAAR) in August, below expectations. The July housing starts growth rate was revised up 3.4pp to -9.0%. Housing starts have been particularly volatile this year, with starts increasing or declining by an average of 11% month-over-month over the last five months. Building permits decreased 2.7% to 1,394k (SAAR), somewhat below consensus expectations.

3. While total housing starts declined in August, single-family housing starts—the component of the report relevant for GDP tracking—increased by 7.6% and the July growth rate was revised up by 4.5pp. We boosted our Q3 GDP tracking estimate by 0.2pp to +3.2% (quarter-over-quarter annualized).

4. Initial jobless claims decreased by 10k to 196k in the week ended September 12, below consensus expectations. The four-week moving average of claims decreased by 3k to 203k. Claims rose by 2k in Ohio and Kentucky and declined by 3k in Michigan and 2k in Missouri, New York…