2017.07.2009:17:00UTC+00Philly Fed Index Indicates Notably Slower Growth In July

Philadelphia-area manufacturing activity grew at a notably slower rate in the month of July, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.

The Philly Fed said its index for current manufacturing activity in the region slumped to 19.5 in July from 27.6 in June.

While a positive reading still indicates growth in regional manufacturing activity, economists had expected the index to show a much more modest drop to 24.0.

The bigger than expected decrease by the headline index was partly due to a notable slowdown in the pace of growth in new orders, as the new orders index tumbled to 2.1 in July from 25.9 in June.

The shipments index also slid to 12.2 in July from 28.5 in June, while the number of employees index fell to 10.9 from 16.1.

The report said the prices paid index also dipped to 19.1 in July from 23.6 in June, and the prices received index dropped to 9.0 from 20.6.

Looking ahead, the Philly Fed said the survey's six-month indicators remained positive in July, with firms generally expecting growth to continue.

The diffusion index for future general activity climbed to 36.9 in July from 31.3 in June, as over half of the manufacturers expect increases in activity over the next six months.

On Monday, the New York Fed released a separate report showing activity in the New York manufacturing sector also grew at a notably slower pace in July.

The New York Fed said its general business conditions index dropped to 9.8 in July from 19.8 in June. Economists had expected the index to fall to 15.0.