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The numbers: The Philadelphia Federal Reserve said Thursday its gauge of regional business activity fell to 17.6 in April from jumping to 27.4 in the prior month, which was its highest reading since November 2021.
Economists polled by the Wall Street Journal expected a 21.9 reading. Any reading above zero indicates expansion in the manufacturing sector.
Key details: The headline index is based on a single stand-alone question about business conditions unlike the Institute for Supply Management’s national manufacturing index which is a composite based on components
In April, the underlying data of the Philly Fed index was also softer. The barometer on new orders fell to 17.8 in April from 25.8 in the prior month. The shipments index dropped to 19.1 from 30.2 .
The measure on six-month business outlook dropped sharply to 8.2 in April from 22.7 in the prior month.
Price increases were also widespread. The prices-paid index rose to its highest reading since June 1979.
Big picture: Demand for goods has kept factories humming but supply chain constraints and high prices may be the cause of the lack of optimism about the next few months.
A similar survey, the Empire State index for New York, surged 36 points to 24.6 in April.
Economists use the regional Fed surveys to get an early read on the Institute for Supply Management’s national manufacturing activity index. In March, the ISM factory index slipped 1.5 percentage points to 57.1, the lowest reading since September 2020.
Market reaction: U.S. stocks
DJIA,
SPX,
were set to open higher Thursday as a result of strong corporate earnings.
