The numbers: The Philadelphia Fed manufacturing index in May rose to -43.1 from – 56.6 in April, which was the lowest level in forty years.
Any reading below zero indicates worsening conditions. Economists polled by MarketWatch expected a -40 reading.
What happened: The survey found that 58% of firms reported a decrease in activity while only 15% reported an increase.
The new orders index increased 45 points to a reading of -25.7. The shipments indexed increased 44 points to -30.3. The employment index increased 31 points to -15.3.
Firms expect the current slump to last less than six months. The index for future activity rose 7 points to 49.7. Over 62% of firms expect increases in activity over the next six months, while 13% expect declines.
Big picture: A similar survey conducted by the New York Fed said conditions remained dreary, rebounding to -48.5 in May from -78.2 in the prior month. The coronavirus pandemic continues to weigh heavily on manufacturing. The bounce in May in the regional surveys is due in part to firms saying that activity is steady at zero rather than declining sharply last month, economists said.
Market reaction: U.S. stock index futures were under pressure as tension between the Trump administration and China flared overnight. On Wednesday, the Dow Jones Industrial Average DJIA, +1.52% rallied 369 points to finish at 24,575.
Add Comment