Philly Fed index slips in May, misses forecasts

Manufacturing conditions in the Philadelphia region unexpectedly deteriorated further in May, according to the latest report from the Federal Reserve Bank of Philadelphia.

The diffusion index for current activity fell to -1.8 from -1.6 in April. Economists had been expecting the index to move back into expansion territory with a reading of 3.5.

The index for current new orders slid for the second consecutive month, from 0.00 to -1.9% in May.

The Federal Reserve Bank of Philadelphia said: “This month’s Manufacturing Business Outlook Survey suggests essentially no growth of the region’s manufacturing sector. The survey’s indicators for general activity, new orders, shipments, and employment all remained negative.

“Though indicators for future conditions fell from last month, expectations for future growth continue to be positive.”