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The numbers: The Federal Reserve Bank of Philadelphia said Thursday that is gauge of regional business activity fell to 15.4 in December from 39.0 in the previous month. Any reading above zero indicates improving conditions.
Economists expected a 30.0 reading, according to a Wall Street Journal poll.
Key details: The headline index is based on a single stand-alone question about business conditions unlike the national ISM manufacturing index which is a composite based on components.
The gauge of new orders fell 33.7 points to 13.7, while the shipments index fell 16.8 points to 15.3 in December
Unfilled orders retreated 16 points in December to 11.4 from the previous month.
The reading of the six-month business outlook declined 9.5 points to 19 from November’s reading of 28.5.
The index of the number of employees edged up to 33.9 from 27.2 last month, the regional bank said.
The prices-paid index fell to 66.1 from November’s reading of 80, while the prices-received index moved to 50.4 from November’s reading of 62.9.
Big picture: The manufacturing sector remains strong despite the headwind of rising input costs. Prices for wholesale goods are likely rising at their fastest pace in 40 years, though companies have so far been able to pass those higher costs on to consumers, while the Philly Fed index suggests that these pressures could be easing somewhat.
The data follows a strong month for manufacturing activity in New York State, according to a regional Fed survey published Wednesday, and points to a healthy reading from the closely-watched national factory index released by the Institute for Supply Management on the first work day of the month.
Market reactions: U.S. Stocks
SPX,
DJIA,
were set to open higher Thursday as the market, following a late-day rally Wednesday in the wake of the Federal Reserve’s decision to hold interest rates near zero.
