Philly Fed Index Jumps To Six-Month High In June

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Manufacturing conditions in the Philadelphia region have improved in June, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.

The Philly Fed said its diffusion index of current activity jumped to 15.2 in June from 6.7 in May, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to inch up to 8.0.

With the bigger than expected increase, the Philly Fed Index reached its highest level since hitting 24.3 in December of last year.

The increase by the headline index partly reflected a pickup in demand for manufactured goods, as the new orders index jumped to 15.2 in June from 4.0 in May.

The shipments index also surged up to 14.3 in June from 1.0 in the previous month, indicating a significant acceleration in the pace of growth.

On the other hand, the report said the number of employees index fell to 3.8 in June from 6.7 in May, pointing to slower job growth.

The report also showed a turnaround by prices, as the prices paid index shot up to a positive 17.2 in June from a negative 14.2 in May. The prices received index also rose to a positive 4.8 from a negative 5.4.

Looking ahead, the Philly Fed said most of the survey's broad indicators of future growth showed marked improvement in June.

The future general activity index climbed to 39.7 in June from 33.9 in May, reaching its highest level since January.

On Monday, the New York Fed released a separate report showing that activity in the New York manufacturing sector unexpectedly contracted in June.

The New York Fed said its general business conditions index fell to a negative 2.0 in June from a positive 3.1 in May. The decrease surprised economists, who had expected the index to climb to a positive 5.9.

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