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The numbers: The Philadelphia Federal Reserve’s manufacturing index fell 7 points to a seasonally adjusted reading of 17.2 in August, the regional bank said Thursday. This is the second straight decline in the index after it his 27.5 in June.
Any reading above zero indicates improving conditions. Economists polled by MarketWatch expected a 20 reading.
What happened: The headline index is based on a single standalone question about business conditions unlike the manufacturing index which is a composite based on components Below the headline, the new orders index fell 4 points to 19. The shipments index fell 5.9 points to 9.4. The survey found that optimism about the next six months remained solid, with the index for future activity rising 3 points to 38.8.
Big picture: Manufacturing has recovered a lot of ground lost from the coronavirus related lockdowns in mid-March but the slowing in the pace of activity in August fits with concern that further gains for the sector will be difficult. Earlier this week, a similar survey conducted by the New York Fed showed activity slowed with sentiment falling 13.5 points to 3.7 in August.
Market reaction: Stocks were set to open lower on Thursday. The Dow Jones Industrial DJIA, -0.30% lost 85 points in Wednesday’s session.
