The Philadelphia Fed index expanded 1.3 in April which is little changed from the March print of 2.0. Despite the modest decline in the headline, however, the underlying details painted a worst picture. The new orders index fell into negative territory with a reading of -1.0, and the employment index dropped to -6.8. There was also a substantial drop in the inventories index to -22.2 from 0.0. Although not unexpected and in line with consensus view that the accelerated pace of inventory rebuilding in Q1 is unlikely to persist into Q2. The shipments index improved, however, and has now printed in positive territory for the past five months. In all, while it is encouraging to see the index remain in positive territory, manufacturing activity and employment growth is expected to remain a bit softer in the Northeastern US than in other areas such as the Midwest.