Philadelphia-area manufacturing activity was nearly stagnant in the month of June, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.
The Philly Fed said its index for current general activity tumbled to 0.3 in June from 16.6 in May. While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to slip to 11.0.
With the much bigger than expected decrease, the Philly Fed Index fell to its lowest level since turning negative in February.
The steep drop by the headline index came as the shipments index plunged to 16.6 in June from 27.6 in May, while the new orders index slid to 8.3 from 11.0.
The report said the number of employees index also dropped to 15.4 in June from 18.2 in May, indicating a slowdown in the pace of job growth.
On the inflation front, the prices received index plunged to 0.6 in June from 17.5 in May and the prices paid index slumped to 12.9 from 23.1.
The Philly Fed said the diffusion index for future general activity edged up to 21.4 in June from 19.7 in May but noted it remains well below readings of the last few years.
Earlier this week, the New York Fed released a separate report showing regional manufacturing activity took a sharp downward turn in the month of June, with the index of activity in the sector showing a record monthly decline.
The New York Fed said its general business conditions index plunged to a negative 8.6 in June from a positive 17.8 in May, indicating a contraction in manufacturing activity. Economists had expected the index to drop to a positive 10.0.
With the much bigger than expected decrease, the general business conditions index recorded its first negative reading in over two years.