A previous version of the story had incorrect figures for the subcomponents in May and April. The report has been corrected.
The numbers: The Philadelphia Federal Reserve’s business activity index fell to 31.5 in May from a nearly fifty-year high of 50.2 in the prior month, the regional Fed bank said Thursday.
Economists polled by the Wall Street Journal expected a 40.5 reading. Any reading above zero indicates expansion in the manufacturing sector.
What happened: The barometer on new orders fell 3.5 points to 32.5 in May. The shipments index fell 4.3 points to 25.3.
Unfilled orders jumped to 40.4 from 27.2 in the prior month.
The measure on six-month business outlook fell 13.9 points to 52.7, the regional bank said.
The index of the number of employees fell 11.5 points to 19.3.
The prices paid index rose 7.7 points to 76.8 in May. It is the highest level since March 1980. The prices-received index rose 6.5 points to 41, the highest level since 1981.
Big picture: Despite the decline in May, the index is still conveying solid growth, economists said.
Earlier this week, a similar survey conducted by the New York Fed inched down to 24.8 from 26.3 in April. Economists use the New York and Philadelphia regional indexes to gauge the strength of the national ISM manufacturing index, which slipped to a reading of 60.7 in April due in part to supply-chain bottlenecks.