Philly Fed Index Rises More Than Expected In April

Philadelphia 041615

Growth in Philadelphia-area manufacturing activity has seen a modest acceleration in the month of April, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.

The Philly Fed said its diffusion index of current activity rose to 7.5 in April from 5.0 in March, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to inch up to 6.0.

An improvement in labor market conditions contributed to the modest increase by the headline index, as the number of employees index climbed to 11.5 in April from 3.5 in March.

The average employee workweek index also jumped to a positive 3.4 in April from a negative 11.4 in March, indicating that work hours increased at the reporting firms.

While the shipments index also rose to a negative 1.8 in April from a negative 7.8 in March, the negative reading pointed to a continued decrease in shipments.

The report also showed that the new orders index fell to 0.7 in April from 3.9 in the previous month, suggesting that demand for manufactured goods was virtually flat.

The prices paid index also dropped to a negative 7.5 in April from a negative 3.0 in March, while the prices received index rose to a negative 4.1 from a negative 6.4.

Looking ahead, the Philly Fed said the survey's indicators of future activity suggest a continuation of modest growth in the manufacturing sector over the next six months.

The diffusion index for future activity rose to 35.5 in April from 32.0 in March but remained well below the readings over the past year.

On Wednesday, the New York Federal Reserve released a separate report showing an unexpected contraction in regional manufacturing activity in the month of April.

The New York Fed said its general business conditions index dropped to a negative 1.2 in April from a positive 6.9 in March, with a negative reading indicating a contraction in regional manufacturing activity.

The index turned negative for the first time since last December, surprising economists, who had expected the index to inch up to 7.0.

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