RTTNews - Indicating continued weakness in the Mid-Atlantic region's manufacturing sector, the Federal Reserve Bank of Philadelphia released a report on Thursday showing that its index of activity in the sector fell by more than economists had been expecting.
The Philly Fed said its index of current activity fell to a negative 7.5 in July from a negative 2.2 in June, with a negative reading indicating a contraction in the sector. The index had been expected to slip to a reading of negative 4.8.
A downturn in shipments contributed to the weakness in the sector, with the shipments index falling to a negative 9.5 in July from a positive 2.1 in June.
At the same time, the report showed a slowdown in the pace of contraction in new orders, as the new orders index edged up to a negative 2.2 in July from a negative 4.8 in the previous month.
Employment in the sector contracted at a faster pace, however, with the number of employees index sliding to a negative 25.3 in July from a negative 21.8 in June.
On the inflation front, prices paid and prices received turned in a mixed performance for the month, as firms reported less widespread declines in input prices.
While the prices paid index jumped to a negative 3.5 in July from a negative 13.0 in June, the prices received index fell to a negative 21.5 from a negative 16.6.
Looking ahead, the Philly Fed said, Broad indicators of future activity fell somewhat from their six-year highs last month, but they continue to suggest that firms are expecting improved conditions later this year.
The report showed that the future general activity index fell to 51.9 in July from 60.1 in June, although it remained positive for the seventh consecutive month.
Wednesday morning, the New York Fed released its regional manufacturing report, showing that conditions for New York manufacturers were roughly flat in July.
The New York Fed said its general business conditions index rose to a negative 0.6 in July from a negative 9.4 in June, with a negative reading indicating a contraction in activity. Economists had been expecting a more modest increase to a reading of negative 5.0.
While the negative reading indicated a slight contraction in activity, the index rose to its highest level since a positive 0.8 in April of 2008.
In other economic news, the Labor Department released a report earlier showing that first time claims for unemployment benefits continued to decrease in the week ended July 11th.
The report showed that jobless claims fell to 522,000 from the previous week's revised figure of 569,000. Economists had been expecting jobless claims to fall to about 530,000 from the 565,000 originally reported for the previous week.
With the decrease, jobless claims fell further below the 600,000 level, falling to their lowest level since coming in at 508,000 in the week ended December 27th.
However, analysts have pointed out that seasonal issues in the auto sector have continued to impact jobless claims, skewing the data artificially lower.
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