2024.03.2114:17:00UTC+00Philly Fed Index Edges Lower But Remains Positive In March

The Federal Reserve Bank of Philadelphia released a report on Thursday showing a modest slowdown in the pace of growth in regional manufacturing activity in the month of March.

The Philly Fed said its diffusion index for current general activity slipped to 3.2 in March from 5.2 in February, although a positive reading still indicates growth. Economists had expected the index to fall to a negative 2.3.

The slight decrease by the headline index came despite a turnaround by new orders, as the new orders index jumped to a positive 5.4 in March from a negative 5.2 in February.

The shipments index also inched up to 11.4 in March from 10.7 in February, indicating a modest acceleration in the pace of growth.

The report said the number of employees index also crept up to a negative 9.6 in March from a negative 10.3 in February, but a negative reading continues to suggest a decline in overall employment levels.

On the inflation front, the prices paid index tumbled to 3.7 in March from 16.6 in February, while the prices received index dipped to 4.6 in March from 6.2 in February.

The Philly Fed also said future activity indicators rose, suggesting more widespread expectations for overall growth over the next six months.

The diffusion index for future general activity surged to 38.6 in March from 7.2 in February, reaching its highest reading since July 2021.

Last Friday, the New York Fed released a separate report showing regional manufacturing activity has contracted at a significantly accelerated rate in the month of March..

The New York Fed said its general business conditions index tumbled to a negative 20.9 in March from a negative 2.4 in February, with a negative reading indicating contraction. Economists had expected the index to decrease to a negative 7.0.

Looking ahead, the New York Fed said firms expect conditions to improve over the next months, although optimism remains subdued, with the index for future business conditions inching up to 21.6 in March from 21.5 in February.