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Philly Fed Index Jumps More Than Expected But Remains Negative In May
(RTTNews) - Philadelphia-area manufacturing activity remained weak in the month of May, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.
The Philly Fed said its diffusion index for current general activity jumped to a negative 4.0 in May from a negative 26.4 in April, but a negative reading still indicates contraction. Economists had expected the index to climb to a negative 11.0.
The sharp increase by the headline index partly reflected a substantial turnaround by new orders, as the new orders index spiked to a positive 7.5 in May from a negative 34.2 in April.
The number of employees index also surged to 16.5 in May from 0.2 in April, with most firms continuing to report no change in employment levels but the share of firms reporting increases exceeding the share reporting decreases.
Meanwhile, the Philly Fed said the shipments index slid to a negative 13.0 in May from a negative 9.1 in April, falling to its lowest level since November 2023.
The report also said the prices paid index jumped to 59.8 in May from 51.0 in April and the prices received index surged to 43.6 in May from 30.7 in April. Both price indexes reached their highest readings since June 2022.
Looking ahead, the Philly Fed said firms continued to expect growth over the next six months, with the diffusion index for future general activity soaring to 47.2 in May from 6.9 in April.
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