Philadelphia-area manufacturing activity expanded at a slightly slower rate in the month of June, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.
The Philly Fed said its diffusion index for current general activity slipped to 30.7 in June from 31.5 in May, although a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to edge down to 31.0.
The modest decrease by the Philly Fed Index reflected a notable slowdown in the pace of growth in new orders, with the new orders index tumbling to 22.2 in June from 32.5 in May.
On the other hand, the report said the shipments index climbed to 27.2 in June from 21.0 in May, indicating shipments increased at a faster rate.
The number of employees index also spiked to 30.7 in June from 19.3 in May, pointing to a significant acceleration in the pace of job growth.
The report also showed the prices received index rose to 80.7 in June from 76.8 in May, while the prices received index advanced to 49.7 from 41.0.
Looking ahead, the Philly Fed said most future indicators improved, suggesting that more firms expect overall growth over the next six months.
The diffusion index for future general activity surged to 69.2 in June from 52.7 in May, reaching its highest level in nearly 30 years.
“Our Recovery Trackers signal upbeat regional dynamics, and production is poised to stay strong amid a summer boom,” Oren Klachkin, Lead U.S. Economist at Oxford Economics.
He added, “A strong drumbeat of healthy goods demand, rising capital expenditures, strengthening external demand, and fiscal stimulus will keep regional manufacturing on a solid course.”
On Tuesday, the New York Fed released a separate report showing New York manufacturing activity expanded at a slower rate in the month of June.
The New York Fed said its general business conditions index fell to 17.4 in June from 24.3 in May. Economists had expected the index to dip to 22.0.
Despite the slowdown in the pace of growth in June, the New York Fed said firms remained optimistic that conditions would improve over the next six months.
The index for future business conditions spiked to 47.7 in June from 36.6 in May, with the index for future employment reaching a record high.
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