Manufacturing Slows in Northeast

NEW YORK ( TheStreet) -- A flood of macro data released Thursday morning showed a mix of trends on several fronts. Differing manufacturing reports indicated activity along the East Coast and production around the nation slowed to a more plodding growth pace of late, but a separate read on the jobs market appeared to show fewer people applied for state unemployment insurance last week.

Data assessing manufacturing activity around the New York region fell well below market projections, hinting at a slowdown in the area. The New York Federal Reserve said the group's Empire State Manufacturing Index registered a 5.1 in July. Though the index continues to hold above the zero mark, reflecting growth in the sector, the pullback marks a steep decline from the 19.57 reading in June and was well off forecasts calling for an 18 reading.

The report, which is culled using a survey of manufacturing executives around New York, showed declines across several individual measures. A reading on new orders slid 7 points to register a 10.1, while a reading on unfilled orders fell to its worst mark since December. Shipments also grew at a much slower pace as that index declined 13 points to register a 6.3.

Continuing the trend, the Philadelphia Federal Reserve also suggested a slowdown in its regional factory ranks in the morning. The group's manufacturing index tumbled to a 5.1 reading in July from an 8 in June. Observers were looking for that group's manufacturing gauge to increase to 10.1 this month.

Output data has taken on renewed importance as market-watchers continue looking for signs that manufacturers and other producers are expecting a slowdown. On that front, a separate report from the Federal Reserve showed industrial production increased modestly in June, rising by 0.1%. Though that beat the market view, which was looking for no change, production still finished slower compared with the 1.3% rise witnessed in May.

The measure looks at output from major industry groups like manufacturing, mining and utilities. But in following the trend of other economic reports released today, the report's manufacturing production measure slipped 0.4% in June.

Capacity utilization also remained unchanged and landed around expectations at 74.1%, which is 5.9 percentage points above the year-earlier mark, according to the report.

New jobless claims fell by a seasonally adjusted 31,000 to 429,000 for the week ended July 10, according to the Labor Department. That was better than projections by economists, provided by Briefing.com, which were expecting new applications to fall to 450,000 from the prior week's pre-revised 454,000 total.

The four-week moving average for initial claims, which offers a less erratic read on claims data, also fell by 11,750 to 455,250, though the number of those continuing on jobless benefit roles climbed up to 4.681 million from 4.434 million.

Separately, the Labor Department also suggested inflation was kept at bay in June in the wholesale ranks. The group's producer price index declined by 0.5%, though forecasts were calling for a 0.1% drop. Still, after stripping out potentially volatile food and energy costs, the measure's so-called "core" reading edged higher by 0.1%.

The government is scheduled to release inflation data at the consumer level Friday. Wall Street prognosticators expect the June consumer price index to edge up 0.1%, though its core measure will probably retreat by 0.1%.

After the deluge of data, stocks began the Wednesday session in the red. But losses accelerated after the Philly Fed report. The Dow Jones Industrial Average was recently off by 102 points, or 1%, at 10,264. The S&P 500 was down 12 points, or 1.1%, at 1084, while the Nasdaq was off by 24 points, or 1.1%, at 2226.

--Written by Sung Moss in New York

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