Manufacturing activity in the Philadelphia area expanded at a slower rate in the month of February, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.
The Philly Fed said its diffusion index for current activity slid to 16.0 in February from 23.2 in January, although a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to dip to 20.0.
The bigger than expected decrease by the headline index came as the new orders index fell to 14.2 in February from 17.9 in January, and the shipments index tumbled to 13.4 from 20.8.
On the other hand, the number of employees index climbed to 32.3 in February from 26.1 in January, indicating a faster rate of job growth.
The report also showed the prices paid index dropped to 69.3 in February from 72.5 in January, while the prices received index rose to 49.8 from 46.4.
Looking ahead, the Philly Fed said firms responding to its Manufacturing Business Outlook Survey continue to anticipate growth over the next six months.
The report showed the diffusion index for future general activity edged down to 28.1 in February from 28.7 in January.
"Solid goods demand will keep regional manufacturing activity expanding at a healthy pace," said Oren Klachkin, Lead US Economist at Oxford Economics.
He added, "We should see more encouraging news on the supply chain front as bottlenecks loosen, materials shortages dissipate, and more Americans return to the job market as savings buffers diminish."
On Thursday, the New York Fed released a separate report showing a modest rebound in regional manufacturing activity in month of February.
The New York Fed said its general business conditions index rose to a positive 3.1 in February from a negative 0.7 in January.
While a positive reading indicates growth in regional manufacturing activity, however, economists had expected the index to show a more significant rebound to a positive 12.2.
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