Philly Fed Index Indicates Notably Slower Growth In July

A report released by the Federal Reserve Bank of Philadelphia on Thursday showed a slowdown in the pace of growth in Philadelphia-area manufacturing activity in the month of July.

The Philly Fed said its diffusion index for current general activity fell to 21.9 in July from 30.7 in June, although a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to slip to 28.0.

The much bigger than expected decrease by the headline index came as the new orders index slid to 17.0 in July from 22.2 in June, while the shipments index fell to 24.6 from 27.2.

The number of employees index also edged down to 29.2 in July from 30.7 in June, indicating a slight slowdown in the pace of price growth.

The report also showed the prices paid index tumbled to 69.7 in July from 80.7 in June, while the prices received index slipped to 46.8 from 49.7.

Looking ahead, the Philly Fed said the diffusion index for future general activity tumbled to 48.6 in July from a nearly 30-year high of 69.2 in June.

The Federal Reserve Bank of New York released a separate report on Thursday showing a substantial acceleration in the pace of growth in New York manufacturing activity in the month of July.