1.0 reading still well below levels seen earlier this year
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The index of manufacturing activity in the Philadelphia region returned to positive territory for the first time in three months in October but remained at low levels, according to a report released Thursday.
The Federal Reserve Bank of Philadelphia reported its diffusion index of current economic activity rose to positive 1.0 in October from negative 0.7 in September.
The increase was not as strong as expected. Economists polled by MarketWatch were expecting the index to rise to 1.4. See MarketWatch calendar of U.S. indicators.
The index is still well below levels earlier this year, consistent with a slowdown in manufacturing in recent months after a surge as the recession ended.The index was 21.4 as recently as May.
Other regions haven’t been as weak, according to the Empire State index released last week and the Beige Book released Wednesday. See story on Beige Book.
“Of the major ISM-related surveys, the Philly index has tended to be one of the weakest relative performers in recent months,” said Yelena Shulyatyeva, an economist at BNP Paribas.
In October, indexes for new orders and shipments continued to indicate weakness, the Philadelphia Fed said.
The new orders index remained negative for the fourth consecutive month. Firms continue to report decline in inventories and unfilled orders. The index for employment was slightly positive.
About 20% of firms surveyed reported increases in employment, just above the 17% that reported decreases.
More firms reported declines in average work hours for existing employees than reported increases.
The future general activity index increased 15 points to a reading of 41, its highest reading in six months.
In a separate report, the Labor Department reported that initial jobless claims fell to 452,000 in the latest week from 475,000 in the prior period. See other economic reports.
The Conference Board also reported that the index of leading economic indicators advanced 0.3% in September.
