Philadelphia-area manufacturing activity continued to grow at a moderate pace in March, the Federal Reserve Bank of Philadelphia revealed in a report on Thursday, with the index of activity in the sector rising by more than expected.
The report showed that the Philly Fed's diffusion index of current activity rose to 12.5 in March from 10.2 in February, with a positive reading indicating growth in the manufacturing sector. Economists had been expecting the index to edge up to a reading of 11.5.
The Philly Fed noted that the bigger than expected increase lifted the index to its highest reading since April of last year.
At the same time, the report showed that the new orders index tumbled to 3.3 in March from 11.7 in February, suggesting a notable slowdown in the pace of new orders growth.
The shipments index also showed a significant decrease, although it remained positive. The index fell to 3.5 in March from 15.0 in the previous month.
Meanwhile, the number of employees index showed a sizeable increase, climbing to 6.8 in March from 1.1 in February. The increase indicated an acceleration in the pace of job growth.
The inventories index also climbed to a positive 0.9 in March from a negative 12.9 in February, suggesting an expansion in inventories compared to the contraction seen in the previous month.
On the inflation front, the prices paid index slid to 18.7 in March from 38.7 in February, while the prices received index fell to 8.4 from 15.0.
The Philly Fed also said its future general activity index edged down to 32.9 in March from 33.3 in February, although it remains at a relatively high level.
Earlier in the day, the New York Federal Reserve released a separate report showing a continued expansion in regional manufacturing activity, with the index of activity in the sector showing an unexpected increase.
The New York Fed said its general business conditions index rose to 20.2 in March from 19.5 in February. The increase surprised economists, who had expected the index to drop to a reading of 17.5.
However, as with the report from the Philly Fed, the component indexes in the New York Fed report presented a more mixed picture.
Miller Tabak's Peter Boockvar said, "Bottom line, while the Philly and N.Y. manufacturing surveys rose to multi-month highs, the components were very mixed and thus more manufacturing data in other regions of the country need to be seen in order to draw more specific conclusions about growth."
by RTT Staff Writer
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