Philly Fed index crashes in April, but expectations hold up

A key regional manufacturing sector gauge plummeted in April as factories were shuttered in response to the Covid-19 pandemic.

The Federal Reserve bank of Philadelphia's manufacturing sector index fell from a reading of -12.7 for March to -56.6 in April, plumbing its lowest reading since July 1980.

A sub-index for new orders received by companies took the biggest hit, retreating from a reading of -15.5 to -70.9, while that for employment slid from 4.1 to -46.7.

Nevertheless, manufacturers in the US mid-Atlantic region continued to expect "overall growth" in new orders, shipments, and employment over the next six months, the Philly Fed said.

Thus, a sub-index linked to firms' expectations for activity in six months' time improved from 35.2 to 43.0.