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Philly Manufacturing Index Declines More Than Expected

July 16th, 2009 Michael McDonough
The Philadelphia Fed Manufacturing Index fell to -7.5 this month compared to -2.2, last month. Looking deeper into the details, the future general activity index remained positive, but declined to 51.9 from 60.1 last month. Further deterioration to this component could indicate continued weakness in in the general business activity index through the beginning of 2010. This manufacturing index is highly correlated with both ISM and industrial production.

The prices paid index increased to -3.5 from -13.0 a month prior. New orders moved to -2.2 from -4.8 a month prior, any reading below 0 indicates a contraction. The labor market conditions index continued facing pressure coming in at -25.3, compared to -21.8 in June.

I believe we are likely still far off from any sustained recovery in the manufacturing sector. But, the worst is behind us.

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