Philadelphia-area manufacturing flat in September
Manufacturing activity in the Philadelphia area was essentially flat in September, which was an improvement from August but less than what economists forecast.
Manufacturing activity in the Philadelphia area was essentially flat in September, which was an improvement from August but less than what economists forecast.
Several individual components of the Federal Reserve Bank of Philadelphia's monthly Business Outlook survey, which was released Thursday, were worrisome - especially new orders received by manufacturers and shipments of their finished products.
The survey's overall index rose to minus 0.7 in September from minus 7.7 last month. Any index level below zero indicates manufacturing activity is contracting.
"Manufacturing is showing signs of fatigue," said Ryan Sweet, a senior economist at Moody's Analytics Inc., of West Chester. "All indications suggest manufacturing is limping into the fourth quarter."
Economists surveyed by Bloomberg News had forecast that the index would rise to a positive 0.3.
"The index, which has been negative for two consecutive months, suggests that growth has stalled," the Fed said.
Before August, the index had been positive for 11 months, indicating growth in manufacturing and a rebound from the recession.
A separate manufacturing report Wednesday showed that the sector in the New York region expanded this month at the slowest pace in more than a year.
In Philadelphia, the new orders and shipments indexes "continued to indicate weakness this month," the Fed said. New orders fell one point to minus 8.1, and shipments dropped to minus 7.1 from minus 4.5.
Also, the index for average hours worked by manufacturing employees fell.
Looking ahead over the next six months, the future-activity index for Philadelphia-area manufacturing remained positive for the 21st straight month, but the optimism was well below levels in the first half of this year.
That was reflected in the results of a special question the Fed asked manufacturers concerning production at their plants in the fourth quarter this year compared with the summer quarter. Nearly half of the manufacturers surveyed forecast a decline in production, while about one-quarter saw an increase. The rest said they expect no change.
Firms generally reported declines in prices for their own manufactured goods and for the cost of their raw materials.
The survey covered 82 manufacturers in the eastern two-thirds of Pennsylvania, the southern half of New Jersey, and all of Delaware.
mOther Economic Indicators
Besides the Philadelphia manufacturing survey, there were several other reports Thursday.
Foreign Trade
The figures: The U.S. current account trade deficit grew to $123.3 billion in the second quarter, up 12.9 percent from the first quarter.
What they mean: It might show that Americans are regaining their appetite to spend.
Initial Jobless Claims
The figures: They fell by 3,000 last week to 450,000.
What they mean: Claims are down 11 percent in the last month, so employers are cutting fewer jobs.
Producer Prices
The figures: Wholesale prices rose 0.4 percent in August. But without food and energy, they were up just 0.1 percent.
What they mean: Inflation still poses little threat.
SOURCE: Associated Press EndText