Philly Fed Report Shows Manufacturing Sector Improving
This is an important report for both investors and trucking companies because manufacturing accounts for about 20% of U.S. economic production and is one of trucking’s largest and most important customer segments.
In other economic news, the Labor Department said that the number of new claims for U.S. jobless benefits fell 34,000 to 400,000 in the week ended June 16.
The four-week moving average, closely watched by economists because it smooths out weekly volatility, fell to 422,500 from 425,250 the prior week.
Although the report from the Philadelphia Fed continued to show weakness in the region’s manufacturing sector, the future business index jumped to 58.2 in June from 33.1 in May. Reuters noted this sharp rise has some analysts believing there will be a slow but steady recovery during the second half of the year.
Not all of the report was positive, however. The new orders index, watched as an early indicator of future manufacturing output, fell to -9.3 from -4.8 in May. Also, firms again cut jobs from their payrolls, pushing the employment index to -14.3 in June from -11.1, its eighth straight month of contraction.
These are among the reasons why one analyst told Bloomberg that the report shows manufacturing is stuck in a recession, and things will not change until there is an improvement in profits.
This Fed’s territory includes eastern Pennsylvania cities of Harrisburg, Scranton and Wilkes-Barre as well Philadelphia; southern New Jersey including Trenton; plus Wilmington and Dover in Delaware.
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