Philly Fed Index Indicates Slightly Slower Contraction In March

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The Federal Reserve Bank of Philadelphia released a report on Thursday showing regional manufacturing activity contracted at a slightly slower rate in the month of March.

The Philly Fed said its diffusion index for current activity inched up to a negative 23.2 in March from a negative 24.3 in February, with a negative reading indicating a contraction. Economists had expected the index to climb to a negative 14.5.

The uptick by the headline index came despite an accelerated contraction in new orders, as the new orders index tumbled to a negative 28.2 in March from a negative 13.6 in February.

The report also showed a substantial downturn by shipments, with the shipments index plunging to a negative 25.4 in March from a positive 8.7 in February.

The number of employees index also slumped to a negative 10.3 in March from a positive 5.1 in February, indicating a decrease in employment.

Looking ahead, the Philly Fed said most future indicators weakened, suggesting firms continue to have tempered expectations for growth over the next six months.

The diffusion index for future general activity decreased for the second consecutive month, falling to a negative 8.0 in March from a positive 1.7 in February.

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