Philadelphia Fed Manufacturing Gauge Slips to Four-Month Low

(Bloomberg) -- The Federal Reserve Bank of Philadelphia’s survey of manufacturers showed conditions weakened to a four-month low as more firms reported lower prices, the latest evidence of lost momentum in the factory sector.

The general activity index fell to 0.3 in June from 16.6 the prior month, according to a report Thursday that was below all but one forecast in a Bloomberg survey of economists that had projected a drop to 10.4. The slump follows a separate report Monday showing a Fed gauge of factories in New York state on fell by the most on record.

Such readings add to concerns for policy makers, who decided this week to hold interest rates steady while signaling that they may be poised to cut borrowing costs in coming months. A report earlier this month showed a key measure of U.S. manufacturing fell in May to the lowest level since October 2016, a sign President Donald Trump’s trade war with China is weighing on the expansion.

The sub-gauges of the Philadelphia report showed new orders and shipments slipped. The current prices received index declined nearly 17 points to 0.6, the lowest since October 2016.

To contact the reporter on this story: Ryan Haar in Washington at rhaar3@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Jeff Kearns, Alister Bull

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