The Philadelphia Fed’s manufacturing barometer turned negative, joining the New York Fed and Richmond Fed, which stagnated in the industry.
The Federal Reserve Bank of Philadelphia said on Thursday that its regional business activity index fell to minus 3.3 in June from plus 2.6 in May.
According to Econoday, economists expect the index to actually rise to 5.5.
Any result below zero indicates a recession in the manufacturing sector.
The new orders indicator dropped 35 points to minus 12.4, indicating a large drop in demand. The shipping index fell 25 points but remained in positive territory at 10.8.
The Future General Activity Index fell for the fifth month in a row to a negative reading of 6.8, the first negative reading since December 2008.
The Future New Orders Index fell 24 points to minus 7.4. The Future Shipping Index fell 29 points to 3.6.
Inflationary pressures remain very high and prices have generally risen despite some easing since May. Seventy-one percent of manufacturers reported higher production costs, and 51.5 percent reported higher prices for future products. While 61.8% expect commodity prices to rise within six months, 53.7% expect their own prices to rise.
Labor market indicators show that tensions continue. The job index rose from 25.5 to 28.1, and 31.3% of companies said they were hiring new employees. The job prospects index fell from 29.2 to 10.5, with 20.6 percent counting on salary increases, 67.9 percent expecting no change and 10.5 percent counting on staff reductions.
Richmond Fed and New York Fed indices fell into negative territory in January. On Wednesday, the Federal Reserve Bank of New York reported that its index improved but remained negative, contrary to forecasts it will return to growth. Richmond Fed’s June data will be released on 28 June.
The Federal Reserve Bank of Kansas City and the Federal Reserve Bank of Dallas continued to point to growth in May, and the Dallas Fed survey shows expansion is accelerating. Both Fed regional banks cover high-risk areas in the energy sector.
The survey included manufacturing companies in the Third Federal Reserve District, which includes eastern Pennsylvania, southern New Jersey, and Delaware.
Source: Breitbart
