Philly Fed Shock: Manufacturing Much Weaker Than Expected in June

Manufacturing conditions weakened in eastern Pennsylvania, southern New Jersey, and Delaware, the Philadelphia Federal Reserve Bank said on Thursday.

The Philly Fed’s survey of manufacturing businesses in the region showed that current activity declined to a reading just above zero in June. New orders, shipments, and employment remained positive but declined from their month earlier readings.

Economists had forecast the current activity index to fall to 11.0 from 16.0 in May, which would have been a continuation of solid growth. Instead, it fell to 0.3, a reading verging on contraction.

Most of the survey’s future activity indexes improved but continue to reflect muted optimism for the remainder of the year, the Philly Fed said.