Philly Fed Index Rises to 21.4 in May

PHILADELPHIA (TheStreet) -- Manufacturers said economic conditions in the factory ranks around the Philadelphia region inched higher this month, suggesting continued growth in the sector that was helped by improving shipments.

The primary manufacturing activity index from the Philadelphia Federal Reserve Bank registered a 21.4 in May, marking its fourth straight rise; the Philly Fed highlighted the index's ninth straight monthly anniversary in positive territory. That's better than the 20.2 reading marked in April and ahead of the consensus forecast, provided by Briefing.com, calling for this month's figure to come in at 20.7.

The gauge is created using survey responses from manufacturing executives around the area.

A particular assessment measuring shipments, in particular, reflected some growth, rising to a 15.8 reading from 5.6 last month.

Still, new orders, unfilled orders, delivery times and inventory gauges all took a dip this month, reflecting some weakness in each category. Delivery times and inventories also turned negative during the month, falling to -1.2 and -7.9, respectively.

Indices examining the jobs picture in manufacturing also took a step back in May, despite the report's note that survey responses continued to suggest some improvements in the job market. An index examining employment numbers dipped to a 3.2 reading after hitting 7.3 last month, while the barometer concerning the average employee work week also declined to 7 this month from 8.3 in April.

In other job news, the Labor Department said earlier Thursday that initial jobless claims made an unexpected and unwanted surge last week, rising by 25,000 to reach a seasonally adjusted 471,000.

Looking ahead, the Philly Fed report also hinted at continued optimism among executives as the future general activity index stayed in positive territory for another month. Still, that measure declined to 37 in May after registering 44.2 in April and 52 in March.

Stocks continued struggling after the report's release, mostly taking their cue from the euro and the downbeat claims figures. The Dow Jones Industrial Average was selling off by 267 points, or 2.6%, at 10,178, while the S&P 500 was tumbling 32 points, or 2.9%, at 1083.

--Written by Sung Moss in New York

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