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Philly Fed Index Drops Less Than Expected In September

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A report released by the Federal Reserve Bank of Philadelphia on Thursday showed a modest slowdown in the pace of growth in regional manufacturing activity in the month of September.

The Philly Fed said its diffusion index for current general activity fell to 12.0 in September from 16.8 in August, although a positive reading still indicates growth in regional manufacturing activity. The index had been expected to drop to 11.0.

The drop by the headline index reflected a slowdown in the pace of growth in new orders, as the new orders index edged down to 24.8 in September from 25.8 in August.

On the other hand, the report said the shipments index jumped to 26.4 in September from 19.0 in the previous month.

The number of employees index also surged up to 15.8 in September from 3.6 in August, indicating a notable acceleration in the pace of job growth.

The prices index also showed significant increases, with the prices paid index spiking to 33.0 in September from 12.8 in August and the prices received index surging up to 20.8 from 13.0.

Looking ahead, the Philly Fed said the survey's future general activity index moderated but continues to suggest growth over the next six months.

The diffusion index for future general activity tumbled to 20.8 in September from 32.6 in August, as the future new orders index and the future shipments index both decreased.

However, firms remained optimistic about future hiring, with the future employment index climbing to 30.6 in September from 25.0 in August.

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