Philly Fed Index Extends Pullback But Still Indicates Growth In March

(RTTNews) - A report released by the Federal Reserve Bank of Philadelphia on Thursday said regional manufacturing activity expanded overall but was less widespread in the month of March.

The Philly Fed said its diffusion index for current general activity slid to 12.5 in March after plunging to 18.1 in February, although a positive reading still indicates growth. Economists had expected the index to slump to 8.5.

The diffusion index for current general activity continued to give back ground after skyrocketing to its highest level since April 2021 in January.

The extended pullback by the headline index came amid steep drops by the new orders and shipments indexes, which fell sharply but remained positive.

The new orders index tumbled to 8.7 in March from 21.9 in February, while the shipments index plummeted to 2.0 in March from 26.3 in February.

Meanwhile, the report said the employment index surged to 19.7 in March from 5.3 in February, reaching its highest reading since October 2022.

The prices paid index also jumped to 48.3 in March from 40.5 in February, reaching its highest reading since July 2022, but the prices received index fell to 29.8 in March from 32.9 in February.

Looking ahead, the Philly Fed said the survey's future indicators suggest less widespread expectations for growth over the next six months.

The diffusion index for future general activity dove to 5.6 in March from 27.8 in February, slumping to its lowest reading since January 2024.

The Federal Reserve Bank of New York released a separate report on Monday showing regional manufacturing activity dropped significantly in the month of March.

The New York Fed said its general business conditions index plunged to a negative 20.0 in March after jumping to a positive 5.7 in February, with a negative reading indicating contraction. Economists had expected the index to fall to a negative 1.9.

Looking ahead, the report said optimism about the outlook waned considerably for a second consecutive month, as the index for future business activity slumped to 12.7 in March after tumbling to 22.2 in February.