Philadelphia Fed manufacturing index goes negative for first time in 2 years

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Manufacturing activity in the U.S. mid-Atlantic region weakened unexpectedly in June as new orders dropped to a two-year low and goods producers’ near-term outlook sank to the lowest since 2008, a closely followed survey showed on Thursday.

The Philadelphia Federal Reserve’s manufacturing activity index slid for a third straight month to a reading of minus 3.3, its first negative reading since May 2020 in the early months of the coronavirus pandemic. That is down from positive 2.6 in May.

The median expectation among economists polled by Reuters was for a reading of 5.5.

The bank’s new orders index contracted to negative 12.4 in June from positive 22.1 a month earlier. The outlook for the next six months – at negative 6.8 – was the lowest since February 2008.

One bright spot was a moderation in inflation, with the prices paid index declining to the lowest since February 2021 at 64.5 in June from 78.9. A reading of factory employment also improved modestly. (Reporting By Dan Burns; Editing by Chizu Nomiyama)

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