Factory Activity Slows Further in Mid-Atlantic Region
Factory activity in the U.S. Mid-Atlantic region shrank again in July, reflecting a weakening economy and the strain of rising costs.
The Philadelphia Federal Reserve Bank said its business activity index was at minus 16.3 in July versus minus 17.1 in June. Economists polled by Reuters had forecast a reading of minus 15.0. The index was in negative territory for the eighth straight month.
Any reading below zero indicates contraction in the region's manufacturing sector.
The prices paid index rose to 75.6 in July, the highest level since March 1980, after a reading of 69.3 in June.
"Cost pressures remain widespread, with a larger share of firms reporting input price increases this month," the Philly Fed said.
The survey showed 61 percent of the firms said they had increased their base prices but 38 percent of the firms said they had been unable to pass on those increases.
"Firms can pass on some but not all of their higher input prices," said Mike Trebling, senior economic analyst at the Philly Fed.
The survey's other components continued to be weak.
The employment index fell to minus 7.3 from minus 6.9 in June.
The new orders gauge was little changed at minus 12.1 versus minus 12.4 while shipments declined to minus 8.0 from minus 6.7 in June.
The survey covers factories in a region emcompassing eastern Pennsylvania, southern New Jersey and Delaware and is looked at closely as one of the first indicators of the health of the U.S. manufacturing sector.