Financial News: Philly Fed Index Unexpectedly Indicates Contraction In Nov

Philly Fed Index Unexpectedly Indicates Contraction In November

11/21/2024 - 09:48:00 (RTTNews)

(RTTNews) - A report released by the Federal Reserve Bank of Philadelphia on Thursday said regional manufacturing activity softened overall in the month of November.

The Philly Fed said its diffusion index for current general activity tumbled to a negative 5.5 in November from a positive 10.3 in October, with a negative reading indicating contraction. Economists had expected the index to edge down to a positive 8.0.

The much bigger than expected slump by the headline index came amid decreases by the new orders and shipments indexes, although they remained positive.

The new orders index slid to 8.9 in November from 14.2 in October, while the shipments index fell to 4.5 in November from 7.4 in October.

Meanwhile, the report said the number of employees index jumped to a positive 8.6 in November from a negative 2.2 in October, indicating an increase in employment.

The Philly Fed also said firms continue to expect growth over the next six months, with growth expectations more widespread this month.

The diffusion index for future general activity surged to 56.6 in November from 36.7 in October, reaching its highest level since June 2021.

On the inflation front, the prices paid slipped to 26.6 in November from 29.7 in October, while the prices received index dipped to 14.3 in November from 17.9 in October.

A separate report released by the Federal Reserve Bank of New York last Friday showed regional manufacturing activity has seen a substantial turnaround in the month of November.

The New York Fed said its general business conditions index skyrocketed to a positive 31.2 in November from a negative 11.9 in October, with a positive reading indicating growth. Economists had expected the index to jump to a negative 0.7.

With the much bigger than expected increase, the general business conditions index reached its highest level since December 2021.

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