Philly Fed Index Returns To Positive Territory In June

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While the Philadelphia Federal Reserve released a report on Thursday showing a bigger than expected rebound by its index of regional manufacturing activity in the month of June, the bank said other broad indicators continued to reflect general weakness.

The Philly Fed said its diffusion index for current activity climbed to a positive 4.7 in June from a negative 1.8 in May, with a positive reading indicating growth in regional manufacturing activity. The index had been expected to rise to a positive 0.8.

Despite the increase by the headline index, the current new orders and shipments indexes remained slightly negative.

The new orders index edged down to a negative 3.0 in June from a negative 1.9 in May, while the shipments index dipped to a negative 2.1 from a negative 0.5.

The report also showed a notable decrease by the number of employees index, which tumbled to a negative 10.9 in June from a negative 3.3 in May.

Nearly 72 percent of firms reported no change in employment during the month, but 20 percent reported decreases compared to the 9 percent that reported increases.

The prices received index also slumped to 3.9 in June from 14.8 in May, while the prices paid index climbed to 23.0 from 15.7.

Looking ahead, the Philly Fed said the survey's future indicators decreased for the second consecutive month but continue to suggest that firms expect growth through the end of the year.

The report said the diffusion index for future general activity declined to 29.8 in June from 36.1 in the previous month.

A separate report released by the New York Federal Reserve on Wednesday showed an unexpected expansion in regional manufacturing activity in June.

The New York Fed said its general business conditions index jumped to a positive 6.0 in June from a negative 9.0 in May.

Economists had expected the index to show a much more modest rebound to a negative 3.5, which would have still indicated a contraction.

The turnaround by the headline index reflected strong rebounds in both new orders and shipments, which increased after last month's declines.

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