After reporting an unexpected contraction in regional manufacturing in the previous month, the Federal Reserve Bank of Philadelphia released a report on Thursday showing that manufacturing conditions continued to weaken in October.
While the Philly Fed said its diffusion index for current activity climbed to a negative 4.5 in October from a negative 6.0 in September, a negative reading continues to indicate a contraction in manufacturing activity. Economists had expected the index to climb to a negative 1.0.
The report said the new orders index tumbled to a negative 10.6 in October from a positive 9.4 in September, turning negative for the first time since May of 2013.
The shipments index also slid into negative territory, plunging to a negative 6.1 in October from a positive 14.8 in the previous month.
The Philly Fed said the indicators for labor market conditions suggest slightly weaker employment, as the numbers of employees index dropped to a negative 1.7 in October from a positive 10.2 in September.
The prices paid index also dipped to a negative 0.1 in October from a positive 0.5 in September, while the prices received index rebounded to a positive 1.3 from a negative 5.0.
Looking ahead, the Philly Fed said the survey's future indicators decreased in October but noted a minority of firms expect a continued downturn in business activity over the next six months.
The diffusion index for future general activity fell to 36.7 in October from 44.0 in September, but 53 percent of firms expect increases over the next six months compared to the 16 percent that expect decreases.
Earlier in the day, the New York Federal Reserve also released a report showing that its reading on regional manufacturing activity increased in October but continued to indicate a contraction.
The New York Fed said its general business conditions index rose to a negative 11.4 in October from a negative 14.7 in September, while economists had expected the index to climb to a negative 7.0.
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