Philadelphia-area manufacturing activity contracted at a slower rate in the month of December, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.
The Philly Fed said its diffusion index for current activity rose to a negative 13.8 in December from a negative 19.4 in November, although a negative reading still indicates a contraction. Economists had expected the index to climb to a negative 10.0.
Despite the increase compared to the previous month, the Philly Fed index remained negative for the fourth consecutive month.
The report showed an accelerated contraction in new orders, as the new orders index slumped to a negative 25.8 in December from a negative 16.2 in November.
The shipments index also tumbled to a negative 6.2 in December from a positive 7.0 in November, indicating a contraction in shipments following an expansion in the previous month.
The Philly Fed said the number of employees index also slid to a negative 1.8 in December from a positive 7.1 in November, dropping into negative territory for the first time since June 2020.
The report also showed slowdowns in the pace of price growth, as the prices paid index fell to 26.4 in December from 35.3 in November and the prices received index dropped to 24.3 from 34.6.
Looking ahead, the Philly Fed said future indicators improved, suggesting firms expect overall growth over the next six months.
The diffusion index for future general activity jumped to a positive 3.8 in December from a negative 7.1 in November, returning to positive territory for the first time since May.
A separate report released by the Federal Reserve Bank of New York showed a downturn in regional manufacturing activity in the month of December.
The New York Fed said its general business conditions index tumbled to a negative 11.2 in December from a positive 4.5 in November. Economists had expected the index to drop to a negative 1.0.
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