Philly Fed Index Falls More Than Expected In July

PM The Federal Reserve Bank of Philadelphia released its report on manufacturing activity in the mid-Atlantic region in the month of July on Thursday, showing that the pace of growth in the manufacturing sector slowed more than expected.

The report showed that the general business activity index fell to 9.2 in July from 18.0 in June, with a positive reading indicating growth in the sector. Economists had expected a more modest decline to a reading of about 14.0.

The bigger than expected slowdown in the pace of growth was partly due to slower new orders growth, with the new orders index falling to 11.3 in July from 18.3 in the previous month.

The pace of employment growth also slowed compared to the previous month, with the number of employees index slipping to 4.1 in July from 5.6 in June.

At the same time, the report showed a notable acceleration in the pace of shipment growth, as the shipments index jumped to 20.3 in July from 5.0 in June.

The report also showed a mixed performance by prices, as the prices paid index dipped to 28.1 in July from 29.7 in June while the prices received index rose to 8.8 from 5.1.

The Philly Fed added that expectations for manufacturing growth over the next six months showed notable improvement, with the future general activity index surging up to 30.4 in July from 16.7 in the previous month.