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Philly Fed Takes Tumble in June

The Philadelphia Federal Reserve Bank released a report saying its index tracking manufacturing conditions in the region registered an 8 in June.
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PHILADELPHIA (

TheStreet

) -- The pace of manufacturing activity around the Philadelphia region took a steep and disappointing step back this month, hinting at some weakness in the factory ranks despite other recent indications to the contrary.

The

Philadelphia Federal Reserve Bank

released a report saying its index tracking manufacturing conditions in the region registered an 8 in June. In May, the index read a more robust 21.4, which was the gauge's best showing since December 2009. The fall underwhelmed Wall Street, as consensus estimates had called for a more subtle drop to 20, according to

Briefing.com

.

The Philly Fed cobbles together the measure by surveying manufacturers in its district. A mark above 0 tends to support notions of expansion, while a showing below the mark hints at manufacturing contraction.

While more particular assessments tracking new orders, inventories, and delivery times on goods improved this month, measures tracking shipments and prices received took a step back.

Labor market conditions also turned negative in June for the first time in months, as individual gauges measuring employee numbers dipped to -1.5 from 3.2 in May, and the average employee workweek index slumped to -1.5 from 7. The downbeat employment news also follows a separate Labor Department report showing a surge in

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first-time jobless claims last week.

Still, survey-takers remained more positive and expect growth in the future. The future general activity index ticked up to read 40.2 in June after hitting 37 last month.

Stocks came under further pressure following the report. Most recently, the

Dow Jones Industrial Average

was losing 85 points, or 0.8%, at 10,325, while the

S&P 500

was sliding 8 points, or 0.8%, at 1106.

Earlier in the week, the

New York Federal Reserve

reported improving manufacturing conditions in its region, as the Empire State Manufacturing index climbed up to 19.57 in June after reading 19.11 in May.

--Written by Sung Moss in New York