Manufacturing in the Philadelphia region unexpectedly contracted in May for the first time in three months as new orders retreated and factories cut back on employment and hours.
The Federal Reserve Bank of Philadelphia’s general economic index declined to minus 5.2 from 1.3 the prior month. Readings greater than zero signal expansion in the area covering eastern Pennsylvania, southern New Jersey and Delaware. The median forecast of economists surveyed by Bloomberg called for a gain to 2.
The data corroborate other figures this week showing manufacturing in the New York Fed region unexpectedly contracted as factories received fewer orders and sales stagnated. Another report from the Federal Reserve indicated output at factories, mines and utilities declined in April by the most in eight months, reflecting broad-based cutbacks at producers.
Economists monitor the Fed’s regional surveys for clues about the Institute for Supply Management national figures on manufacturing. The next ISM report is due June 3. Manufacturing makes up about 12 percent of the economy.
Estimates of 57 economists in the Bloomberg survey before the Philadelphia Fed’s factory index ranged from minus 5 to 5.
The Philadelphia Fed’s new orders measure slumped to minus 7.9, the weakest since June, from minus 1 in April, while shipments decreased to minus 8.5, the poorest reading since September, from 9.1. A measure of employment dropped to minus 8.7, the worst since September 2009, from minus 6.8.
A gauge of the factory workweek decreased to minus 12.4 in May from minus 2.1.
The gauge of prices paid climbed to 6.9 in May after 3.1 a month earlier. An index of prices received rose to minus 3.3 from minus 7.5.
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