Philly Fed manufacturing index unexpectedly turns negative

Manufacturing activity in the Philadelphia region unexpectedly contracted this month, though firms still remain upbeat about growth, according to a survey released on Thursday.

The Philly Fed Manufacturing Index dropped to -5.5 this month from +10.3 in October, according to the Federal Reserve Bank of Philadelphia.

This was the lowest level in three months and well below the consensus forecast of +8.0.

This was the second negative reading since January, with just 18% of manufacturers surveyed reporting increases in general activity, down from 24% in October, while 23% reported decreases, up from 14%.

Both indices for new orders and shipments declined but stayed in positive territory, while the employment index turned positive after being steady the month before.

Looking ahead, the diffusion index for future general activity jumped from 36.7 to 56.6 in November, its highest level since June 2021, while expectations for overall increases in employment over the next six months increased.